The Covid-19 pandemic could leave 45,000 miners without work.
Considering that everyone who works in a South African mine financially supports up to ten other people, it means that nearly half a million South Africans will be affected by retrenchments.
The Mineral Council of South Africa on Thursday released these figures in a brief overview of what it expects could be the impact of the pandemic on the economy.
The council also points out that its research shows that two posts in other sectors are created for each position in the mining sector.
So if 45,000 miners lose their jobs, another 90,000 could lose their jobs in other sectors.
The council warns that if the state of confinement lasts longer than 21 days, as is the case, annual mining production could fall by up to 15%.
Given that the mining sector contributed 8.1% to the country’s gross domestic product in 2019, this would be very detrimental to the economy.
According to the Mineral Council’s review, fixed costs represent about 51% of a mine’s expenditure. So mine still has enormous expenses even if they are not in operation.
That is precisely why mining companies have applied to the Department of Mineral Resources and Energy to continue with limited operations.
Impala Platinum has already said over the weekend that it hopes to start operations this week.
“Like other mining groups of our people, we wanted to start systematically returning this week after the state of containment to prepare for operations. Unfortunately, we had to abandon these plans as the police interpret the containment rules differently than the department does, ”Theron said.
Gold mining company DRDGold, which processes mining dumps south of Johannesburg, said in a statement on Wednesday that it did start operations again at its Ergo and Far West Gold Recoveries.
At Ergo, 34% of staff work two shifts a day, while 60% of FWGR’s workers work in the plant on the same basis.
DRDGold CEO Niël Pretorius said in the statement that although mines could technically continue their operations under the containment regulations, they still applied to the department. It has been agreed that operations will only continue under conditions where workers’ health is not threatened.
AngloGold Ashanti also said in a statement on Wednesday that it had begun limited surface operations at its West Wits and Vaal River sites. The company says only about 500 workers, less than a third of the normal workforce at these sites, are working again. Only about 8% of AngloGold Ashanti’s South African workforce is currently employed.
Operations in the Mponeng mine were completely stopped.