According to the Minerals Council South Africa, full-time employment in the mining sector has shrunk by 56 366 employees over the past five years, from 509 909 in 2013 to 453 543 in 2018. In 1994 this sector had 600 000 employees.
The question is: What are the consequences of a shrinking mining industry? The answer is: A catastrophe!
First, when a miner loses his job, it affects about ten dependents. As mining is so labour intensive it also has a downstream impact with about 1,7 jobs being lost in the contractors’ and support services sectors for each permanent mining job that is lost.
Second, from a labour relations perspective we already see that as the sector shrinks and trade union membership numbers decline, trade union rivalry is mounting as unions try to poach members from each other. This also means that fewer jobs are available for permanent trade union representatives, which in turn, means increased internal jostling for those “gravy train jobs” on offer at the larger trade unions.
Given that the membership fees of trade unions such as the NUM and Amcu amount to 1% of their members’ pay, those unions want to negotiate higher increases for the sake of their own financial sustainability, because higher wages mean more income from trade union membership dues – as an upshot higher wages also mean retrenchments though. Shrinking trade union membership numbers also mean that traditional mining trade unions are now also beginning to organise in other sectors, which could lead to union tensions in those sectors.
As companies scale down and focus on their own sustainability, the tradition of central collective bargaining on the Minerals Council’s platform will start to taper off. Among other things, this will put trade union negotiators under more pressure as they would now have to engage in separate negotiating processes at the various mines.
Third, companies are cutting costs everywhere, and the closure of technical training colleges comes as a major setback for empowerment through skills development. A shrinking sector also means that institutions whose existence is directly linked to mining also have to downscale. Especially institutions such as the Minerals Council and the Department of Mineral Resources will have to reduce staff as their client base diminishes. For example, the Minerals Council now only has 65 staff members, whereas this institution had 6 000 employees (training institutions included) when it was at its peak. Moreover, world class mining engineering departments in engineering faculties such as at the University of Pretoria and the University of the Witwatersrand would also be adversely affected.
Fourth, government’s tax revenue is dropping. That is why mining royalties have been levied since 2010, and carbon tax, which has come into effect on 1 June, have been introduced in part to supplement government’s loss in revenue, but it is strangling the mines.
In the fifth place, the only “dubious” good news is that the less shifts being worked the less mining accidents and deaths should occur. The concern, though, is that safety standards usually drop when junior mining houses take over marginal mines because costs are cut and production targets have to be raised to make a profit, which ultimately compromise mine safety.
Sixth, as mines close down the number of ghost towns will increase. In so many instances, mining companies have taken over the role of dysfunctional municipalities in mining towns, and if those municipal services rendered by the mining companies are steadily declining there will be an increase in protests from frustrated mining communities.
Moreover, illegal mining activities would increase as retrenchments increase because jobless miners would be forced to become “zama-zamas”. An increase in zama-zama activities, in turn, would mean an increase in crime around mining communities.
To curb the decline in mining communities, government introduced its Revitalisation of Distressed Mining Communities Plan following the Marikana events of 2012. For the plan to succeed it is key that the agricultural projects earmarked to eventually replace mining activities receive particular attention.
As mines have a limited time span, the decline in mining cannot be reversed but, in view of its consequences and the fact that we still have sufficient mineral reserves, this shrinking must be slowed down by controlling those negative influences that can be controlled. For this reason, the sustainability of this sector must be the focus of all mining role-players, because mining is important for all South Africans and we dare not allow it to be run into the ground.
Gideon du Plessis is the General Secretary of Solidarity