Putting the 'sad' in SADC
Thématique :
SADC,
sud afrique
By Matthew Hill
The mining slump raises fears about the wider social impact
Instead of the bacon, thousands of foreign mineworkers are going to have to return home with retrenchment letters as the resources downturn hits home.
This spells trouble for neighbouring states piggybacking on SA's mining sector for employment. Mining is by far the biggest employer of migrant labour, at 50%, with the next biggest being manual labour's 10%.
Remittances play a big role in neighbouring countries. In Swaziland, they account for 4,2% of GDP. In Lesotho, it's about a fifth of GDP, while remittances make up about 25% of foreign earnings. Money sent back to families mainly buys food.
Mozambique and Lesotho have compulsory remittances pay, meaning workers have to send a percentage of their earnings back home.
The SA Institute of International Affairs' Tim Hughes says the effect of the imminent retrenchments won't be as great as 10 years ago - when migrant labour accounted for nearly 60% of SA's 563 000 mining workforce - but it will be felt. Foreign workers make up about half that percentage now.
A major restructuring of SA's mining workforce took place from 1990 to 1996, as 45% of mineworkers lost their jobs. Proportionately SA workers suffered the most during this period, with foreign labour ballooning to 59% of all mineworkers in 1997.
Declining employment in the gold sector since 1970 has obviously had an effect. "Retrenchments have had a significant impact on the national economy in Lesotho, due to the loss of remittances," according to a UN report published in April. With announcements from both DRDGold and Simmer & Jack Mines about job cuts in recent weeks, the trend is continuing. This is despite the rand gold price being at near record highs.
The UN's International Research & Training Institute for the Advancement of Women report warns that these remittances are important for the receiving countries, and any structural shifts can have "dire consequences". Frost & Sullivan analyst Wonder Nyanjowa estimates job losses in SA's mining sector will reach 40 000 by the end of 2009. The mining workforce was nearly 500 000 in 2007. In supply and support sectors, the retrenchment figure could hit 150 000.
Government has been quick to respond to the crisis. This week it called an urgent meeting with unions and the Chamber to try to "soften the blow" of job losses. It has set up a task team that has 20 days to come up with a strategy to minimise retrenchments.
The FM was not able to get comment from the Lesotho and Mozambican governments.
Gold mines have historically been the biggest absorber of migrant labour, but platinum has been a growing employer of Mozambicans. Just about all cross-border mine workers in the gold sector are employed through labour bureaus with fixed-term contracts. These contracts stem from treaties between governments.
Though DRDGold and Simmers are the only gold miners that have announced layoffs, platinum company Lonmin has confirmed it is considering large-scale retrenchments. Up to 5 500 workers out of about 25 000 might have to go because of a 60% drop in the platinum price this year. Lonmin's bigger rivals, AngloPlat and Impala Platinum, have yet to say how many jobs will be lost.
Evaporating demand for ferrochrome, of which SA is the biggest global source, will also lead to job cuts. Uranium producer Uranium One is retrenching the 1 000-plus workforce at its mothballed Dominion mine near Klerksdorp.
National Union of Mineworkers (NUM) president Senzeni Zokwana says SA is headed for disaster if job losses and high food prices continue. If 40 000 mineworkers lose their jobs, that figure must be multiplied by 10, he adds - a mineworker has an average of that many dependants.
This will have serious social repercussions. Retrenched migrant workers will struggle to find any employment in their home countries, which offer fewer opportunities than SA.
Teba, a company that organises mining employment for SA companies in Lesotho, Mozambique, Swaziland and Botswana, says mining companies have a "social obligation to reskill" retrenched workers. Teba's Kevin Cotteril says this usually involves activities like brick making, chicken rearing and radio repairs.
Chamber of Mines industrial relations adviser Elize Strydom says individual mining companies usually engage the labour department when retrenchments are envisaged. The company and the department then work together to try to mitigate the negative effects of job losses. Efforts include imparting practical skills.
"Some businesses exploit the situation by employing foreign people, knowing they can pay them as little as they want," Zokwana says, adding that this creates social tension in communities where South Africans lose out. However, he dismisses the possibility of a recurrence of the xenophobic attacks that swept the country in May. The attacks weren't caused by unemployment, Zokwana says.
What Zokwana - also president of the International Federation of Chemical, Energy, Mine & General Workers' unions - does flag, though, is the possibility of higher unemployment leading to higher crime.
Zokwana says the 300 000-strong NUM "can never accept that our members will lose their jobs. I'm not saying that we'll go on strike, but we need to engage."
Government, labour and business need to get together to consider alternative measures that can be taken to minimise job losses in the mining sector, says Zokwana. "Can the state intervene and assist? The state has an interest in the mining industry as a source of foreign exchange, and it's also a major employer." He says both national and local government need to get involved, because the closure of a mine has a big impact on surrounding communities.
Zokwana adds the private sector must also not rush into mass retrenchments, only to be left without a workforce when commodity prices tick up again. The Chamber of Mines acknowledges this, and says retrenchments are a last resort.
The effect on migrant workers in the mining sector will be profound, but many more in neighbouring countries are dependent on SA for informal cross-border trade. These people will also suffer.
The mining slump raises fears about the wider social impact
Instead of the bacon, thousands of foreign mineworkers are going to have to return home with retrenchment letters as the resources downturn hits home.
This spells trouble for neighbouring states piggybacking on SA's mining sector for employment. Mining is by far the biggest employer of migrant labour, at 50%, with the next biggest being manual labour's 10%.
Remittances play a big role in neighbouring countries. In Swaziland, they account for 4,2% of GDP. In Lesotho, it's about a fifth of GDP, while remittances make up about 25% of foreign earnings. Money sent back to families mainly buys food.
Mozambique and Lesotho have compulsory remittances pay, meaning workers have to send a percentage of their earnings back home.
The SA Institute of International Affairs' Tim Hughes says the effect of the imminent retrenchments won't be as great as 10 years ago - when migrant labour accounted for nearly 60% of SA's 563 000 mining workforce - but it will be felt. Foreign workers make up about half that percentage now.
A major restructuring of SA's mining workforce took place from 1990 to 1996, as 45% of mineworkers lost their jobs. Proportionately SA workers suffered the most during this period, with foreign labour ballooning to 59% of all mineworkers in 1997.
Declining employment in the gold sector since 1970 has obviously had an effect. "Retrenchments have had a significant impact on the national economy in Lesotho, due to the loss of remittances," according to a UN report published in April. With announcements from both DRDGold and Simmer & Jack Mines about job cuts in recent weeks, the trend is continuing. This is despite the rand gold price being at near record highs.
The UN's International Research & Training Institute for the Advancement of Women report warns that these remittances are important for the receiving countries, and any structural shifts can have "dire consequences". Frost & Sullivan analyst Wonder Nyanjowa estimates job losses in SA's mining sector will reach 40 000 by the end of 2009. The mining workforce was nearly 500 000 in 2007. In supply and support sectors, the retrenchment figure could hit 150 000.
Government has been quick to respond to the crisis. This week it called an urgent meeting with unions and the Chamber to try to "soften the blow" of job losses. It has set up a task team that has 20 days to come up with a strategy to minimise retrenchments.
The FM was not able to get comment from the Lesotho and Mozambican governments.
Gold mines have historically been the biggest absorber of migrant labour, but platinum has been a growing employer of Mozambicans. Just about all cross-border mine workers in the gold sector are employed through labour bureaus with fixed-term contracts. These contracts stem from treaties between governments.
Though DRDGold and Simmers are the only gold miners that have announced layoffs, platinum company Lonmin has confirmed it is considering large-scale retrenchments. Up to 5 500 workers out of about 25 000 might have to go because of a 60% drop in the platinum price this year. Lonmin's bigger rivals, AngloPlat and Impala Platinum, have yet to say how many jobs will be lost.
Evaporating demand for ferrochrome, of which SA is the biggest global source, will also lead to job cuts. Uranium producer Uranium One is retrenching the 1 000-plus workforce at its mothballed Dominion mine near Klerksdorp.
National Union of Mineworkers (NUM) president Senzeni Zokwana says SA is headed for disaster if job losses and high food prices continue. If 40 000 mineworkers lose their jobs, that figure must be multiplied by 10, he adds - a mineworker has an average of that many dependants.
This will have serious social repercussions. Retrenched migrant workers will struggle to find any employment in their home countries, which offer fewer opportunities than SA.
Teba, a company that organises mining employment for SA companies in Lesotho, Mozambique, Swaziland and Botswana, says mining companies have a "social obligation to reskill" retrenched workers. Teba's Kevin Cotteril says this usually involves activities like brick making, chicken rearing and radio repairs.
Chamber of Mines industrial relations adviser Elize Strydom says individual mining companies usually engage the labour department when retrenchments are envisaged. The company and the department then work together to try to mitigate the negative effects of job losses. Efforts include imparting practical skills.
"Some businesses exploit the situation by employing foreign people, knowing they can pay them as little as they want," Zokwana says, adding that this creates social tension in communities where South Africans lose out. However, he dismisses the possibility of a recurrence of the xenophobic attacks that swept the country in May. The attacks weren't caused by unemployment, Zokwana says.
What Zokwana - also president of the International Federation of Chemical, Energy, Mine & General Workers' unions - does flag, though, is the possibility of higher unemployment leading to higher crime.
Zokwana says the 300 000-strong NUM "can never accept that our members will lose their jobs. I'm not saying that we'll go on strike, but we need to engage."
Government, labour and business need to get together to consider alternative measures that can be taken to minimise job losses in the mining sector, says Zokwana. "Can the state intervene and assist? The state has an interest in the mining industry as a source of foreign exchange, and it's also a major employer." He says both national and local government need to get involved, because the closure of a mine has a big impact on surrounding communities.
Zokwana adds the private sector must also not rush into mass retrenchments, only to be left without a workforce when commodity prices tick up again. The Chamber of Mines acknowledges this, and says retrenchments are a last resort.
The effect on migrant workers in the mining sector will be profound, but many more in neighbouring countries are dependent on SA for informal cross-border trade. These people will also suffer.
