A lot of news coming out of the South African mining sector the last few weeks. With major positive developments being followed by significant setbacks — raising the critical question of whether the sector is on the verge of a comeback, or a descent into deeper chaos.
The positive news has been a slate of recent deals between mining companies and labor unions. With African Rainbow Minerals being the latest example this week.
The platinum miner announced a dealwith the National Union of Mineworkers (NUM) Wednesday. With the two sides settling on two years of 7% annual pay increases — and a rise in medical benefits.
That averts the threat of labor action in this corner of the platinum space. Which was also the case late last month at the Sibanye-Stillwater Kroondal platinum mine — where the major miner struck a three-year deal with its Solidarity trade union.
Sibanye’s deal was very similar to African Rainbow’s. With the miner giving workers a 6 to 7% annual pay increase to 2020, and increasing medical benefits.
Such settlements are a major positive for the South African mining sector. But the news hasn’t been all good — evidenced by a string of mine closures and layoffs the last few weeks.
The latest announcement came from Sibanye-Stillwater’s gold operations this week. With the company saying it will shut its Cooke operation, cutting 2,025 jobs and forcing another 1,350 workers into voluntary separation packages.
Sibanye said the move is coming after prolonged financial losses at Cooke. With managers pointing to one major issue here: illegal mining, of the kind that’s hit profits at numerous other gold operations across South Africa.
That highlights a major challenge for the local sector going forward. With another key issue being increasing regulatory friction — evidenced by further reports last week that platinum miner Royal Bafokeng has been ordered by mine safety inspectors to shut a second shaft at its operations.
That represents a major loss of platinum production — with details of the supposed safety violations still remaining vague. Watch for more elaboration on this benchmark situation, and for ongoing signs of where South Africa’s critical mining output is heading.