90,000 jobs are currently at stake in South Africa’s gold and platinum mines as power utility Eskom increases power prices. The Minerals Council of South Africa reported that the jobs would be shed gradually within the next three years. This, they said, is solely as a result of the MYPD4 tariff increases granted by the power utility.
The threats of job cuts do not come as a huge surprise owing to the current situation where quarter of the labour force in Africa is unemployed. Be that as it may, power outages and steep price increases by Eskom are set to hurt an already fragile growth outlook.
In February, miner Sibanye-Stillwater said it planned to cut nearly 6,000 jobs in a restructuring of its gold mining operations, while Gold Fields said last year it could slash 1,100 jobs. Similarly, Impala Platinum plans to cut its workforce by a third.
Meanwhile, labor unions have threatened strikes over the job cuts at mining firms as well planned reductions at numerous state-owned companies.
Once the largest contributor to South Africa’s gross domestic product, mining has shrunk steadily over the last decade. This is evident in the hard-to-reach deposits, high wage settlements and uncertainty over ownership laws; issues that are since acting as deterrence to investors against a backdrop of slack global demand.
Last week, Statistics South Africa data showed gold production contracted for the 15th month in a row, shrinking by 22.5% in January, while platinum output was up 8.8 %in the same period.