Government, mining firms agree to delay 16,000 job cuts

March 2, 2016 9:31 AM

The biggest mining sector union this week estimated that 36,000 jobs could be lost in the next three months. The minister for mines said in January that 32,000 jobs would be lost.

A miner is seen underground at Lonmin Plc's Karee mine in Marikana, Rustenburg 100 km (62 miles) northwest of Johannesburg, March 5, 2013. REUTERS/Siphiwe Sibeko

A deal struck between South Africa's government, companies and unions has prevented the immediate loss of 16,000 jobs in an industry hurt by a global commodities rout, an official said on Wednesday.

Mining firms, such as Anglo American and Glencore, operating in Africa's most advanced economy are closing shafts and retrenching tens of thousands of workers as the price of platinum, coal and iron ore plunges.

David Msiza, acting director general in the department of mineral resources, told parliament that the deal signed six months ago would keep the 16,000 jobs for now, while other alternatives were being considered to save jobs.

The agreement signed in August by government, the Chamber of Mines and several unions, was aimed at saving jobs in a sector in steady decline since 1986 when its labour force peaked at 829,000 jobs. The sector now has about 500,000 workers.

Besides delaying job cuts, the deal also proposed facilitating the sale of struggling mines, but so far there has not been any announcement of such a purchase.

The mining ministry has held many rounds of talks with companies and unions over planned job cuts, as President Jacob Zuma’s government frets over high unemployment ahead of municipal elections later this year.

About a quarter of the working population is unemployed at a time food prices are rising sharply due to a drought, a combination that could dent support for the ruling African National Congress in the local government polls this year.