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Feb 8, 2013


It is clear that the kind of industrial action which South Africa’s currently experiencing in the mining and farming industry, especially in the Western Cape, does not present long term solutions to these challenges for both the employers and employees. 


‘Industrial action may force employers to make immediate concessions, but it cannot secure long term employment. Wages may be improved through forms of legislation, as is currently the case with the Minister of Labour regarding the farmworkers. Or it may come as a result of industrial action, violence and intimidation. However, if these gains are not in line with the economic realities, it will be artificial with no lasting benefits. Any increases which do not fit into a sustainable business model will lead to all kinds of undesired consequences, which in turn will result in unemployment. A collective solution between all the roleplayers is needed.’ says Gerhard Papenfus, NEASA  CEO. 


‘The Kusasalethu mine scenario illustrates the complexity of the situation currently facing South Africa. It’s true that on the one hand, some workers are indeed earning extremely low wages. There are economic, historic, structural and a multitude of other causes for that.  One can also not ignore the fact that low earners are finding it extremely difficult to make ends meet. However, it’s also true that the millions of unemployed South Africans pose an even bigger threat in the medium to long term. This is indeed an extremely complex matter’, says Papenfus.


Expected widespread retrenchments in South Africa’s gold and platinum mining sectors could be the nail in the coffin for expected growth and development in one of the country’s most critical sectors. Thousands of workers are expected to lose their jobs as companies complete their restructuring plans following last year’s strikes, which affected the majority of the industry. 


Lonmin’s platinum mine in Marikana, Anglo American in Rustenburg and Harmony Gold’s Kusasalethu mine were among those hardest hit by the industrial action last year. Harmony Gold lost between 20-25 kg of gold production a day due to the wildcat strike, which started in October 2012. 


According to news reports, Harmony Gold has suspended production at Kusasalethu mine, warning it will close if a solution to the “lawlessness, violence and intimidation” is not found. Harmony Gold has started a consultation process in terms of the Labour Relations Act, which may result in possible retrenchments and the closing of the Kusasalethu mine. This might lead to 6200 jobs being lost.                                       


‘The only lasting solution is proper education, higher skills levels, higher productivity, the ability to compete in global markets and the ability to profitably manufacture locally. To create this kind of environment will require sacrifices an a changed attitude among all the roleplayers in the economy‘, says Papenfus.


For more information please contact:

Gerhard Papenfus

082 557 2724


What the Economists say – the strikes in the mining sector had been damaging to the industry and desperate measures need to be taken to turn the situation around. Chief Economist at Efficient Group, Dawie Roodt, says that in some instances, some mines were forced to go to their shareholders for capital to keep operations running. ‘We don’t have the figures yet but the mining industry probably contracted by double figures last year. This probably shaved 0.5% off GDP growth for 2012. I’m afraid even more job losses can be expected over the next few months’


Retrenchments in the mining industry is inevitable and could result in government missing its targets to ensure sustained economic development and job creation by a wide margin. Government could end up trying to fix the problem with even more interventionist new policies.  Roodt has warned that government and the industry should join forces in handling the situation with kids gloves as it could bode ominous for the country’s international prospects. ‘It’s likely that we will get further downgrades. If we mishandle the situation like last year and one or two things more go wrong, Grexit for example, a further downgrade could be possible’


NEASA – Established in 1996, the National Employers Association of South Africa is the country’s largest employers’ association registered in terms of the Labour Relations Act. NEASA’s services include collective bargaining, IR services and specialized legal representation at all dispute resolution forums.


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