AngloGold job cuts add to mining’s woes

The producer is set to shed 2,000 posts, with fewer than 116,000 people still employed in gold mines

Job losses in SA’s mining sector continue unabated, with AngloGold Ashanti set to cut 2,000 jobs to shrink its support structure after selling and closing mines in the country.

SA’s gold and platinum mines are shedding thousands of jobs because of the age, depth and costs of running them, combined with relatively low prices for the metals.

From the 380,000 people working on SA’s gold mines in 1995, the figure has dropped below 116,000. From being the world’s largest gold producer for decades, SA has quickly slipped into eighth place, with output of 140 tonnes in 2017.

Employment on platinum mines has dropped to less than 170,000 from a peak of 200,000 a decade ago.

Pan African Resources said recently it was shutting its Evander gold mine and cutting 1,700 jobs because of an unsustainably low rand gold price. Lonmin, the world’s third-largest platinum miner, has started a three-year process to shed 12,600 jobs.

Sibanye-Stillwater stopped its four unprofitable Cooke gold shafts near Johannesburg, shedding more than 3,000 jobs.

Wednesday’s news from AngloGold, the once-dominant gold miner in SA, came shortly after Mineral Resources Minister Gwede Mantashe said he would summon mining companies to explain their decisions to close mines and cut jobs, and forcing his hand on implementing a use-it-or-lose-it principle.

Falling output of South African gold, which has accelerated in recent years, could partially be blamed on a “high number of shafts and mines that are under care and maintenance”, Mantashe said on Wednesday at the annual general meeting of the Minerals Council SA (formerly the Chamber of Mines).

“We will invite people who are culprits of this practice for discussions because reluctantly we are being pushed into invoking the principle of use-it-or-lose it,” Mantashe said.

He said companies with marginal shafts should consider selling them to smaller companies with lower overheads, which could perhaps mine them profitably for longer.

In 2000, SA accounted for 5.4-million ounces of AngloGold’s annual output of 7-million ounces and the group employed 84,000 workers. Just five years later, SA accounted for less than 2.9-million ounces of the company’s 6.5-million ounces and it employed 65,000 people.

By 2017, the company employed 51,000 people for 3.8-million ounces of gold, with half of those employed in SA.

At the start of 2018, it sold the Moab Khotsong mine to Harmony and Kopanang to China’s Heaven-Sent, saving more than 3,000 jobs that were planned at Kopanang. It has shut the old Tautona and Savuka mines.

This radically reduced exposure to SA to just the Mponeng mine and a tailings retreatment operation has meant the miner no longer needed the large support network it once did, said Chris Sheppard, AngloGold’s chief operating officer in SA.

“We are not exactly blessed with a fantastic rand gold price, and that comes into it, but we finished the mine sales and closed those two mines. Now we have to cut our cloth to suit our operations,” he said.

The 8,200-strong workforce in SA would be cut a quarter. An unspecified number of jobs would also be removed from Mponeng and the tailings operations, he said, declining to say whether Mponeng was profitable at the prevailing rand gold price. “At Mponeng, we are taking a medium-term view and seeing what we need over the next 18 months and we need to reduce labour there,” he said.

Not only would jobs be cut, but AngloGold would sell, donate or demolish surface assets such as hospitals, workshops, laboratories, warehouses and buildings it no longer needed, he said/Business Day.

The Independent Observer

John Sakala is a Journalist yearning for independent journalism

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