Mines face looming job losses as demand slows

Kea Modimoeng

Kea Modimoeng

Layoffs are looming in the mining industry as union members have been warned of possible job losses in two separate incidents if the economic situation does not improve.

Lonmin has sent out a letter to trade unions in which the company explains that it is "examining cost containment measures" and that it will be "consulting with its stakeholders including its trade union partners on voluntary separation opportunities linked to a package and any contemplated need to proceed with retrenchments under the prevailing legislation".

The company also mentioned that it was experiencing an immense decrease in the need for platinum - especially due to the drop in new car sales and production.

Jaco Kleynhans, spokesperson for trade union Solidarity, said: "The situation, especially in the mining industry, has now reached an extremely concerning level in which looming job losses are being discussed at various mining groups.

"South Africa produces almost 80percent of the world's platinum, but this commodity does not enjoy the same safe-haven status that gold has. The price depends largely on the physical need for platinum.

"The use of platinum as a catalyst in car exhaust systems represents 54percent of all platinum produced."

It was therefore clear that the local platinum industry would suffer, he said.

The National Union of Mineworkers (Num) has announced that following recent water pumping problems and lost production due to stoppages after fatalities, DRD Gold has also hinted that there will be retrenchments at its ERPM operation.

The two mining companies were not available for comment.