Around 10,000 jobs in South Africa at risk as mining firms announce production cuts

29 July 2015 (Last Updated July 29th, 2015 18:30)

Appoximately 10,000 jobs in South Africa are expected to be cut due to a number of producers opting to slash production at major mines.

Appoximately 10,000 jobs in South Africa are expected to be cut due to a number of producers opting to slash production at major mines.

At least seven mining companies have announced plans for job cuts in past two months in the country.

The latest decision by the mining companies comes due to declining commodity prices in addition to rising wage demands compelling them to reduce staff.

Over the next year, a 20%-30% out of a total workforce of 440,000 in the country is expected to be at risk.

"We are heading for a jobs bloodbath."

South Africa is the biggest producer of platinum and manganese, with mining accounting for more than half of the nation's exports.

Bloomberg quoted research group Economists.co.za chief economist Mike Schussler saying by phone: "We are heading for a jobs bloodbath.

"We've already lost thousands of jobs on mining and it looks like we're going to lose more with commodity prices coming down this quickly, added to the complication of high wage settlements and higher electricity and water rates."

The government aims to create six million new jobs by 2019, yet is experiencing difficulties in doing so due to weak economic growth caused by power shortages, labour strikes and pay-rise demands.

South Africa's gold mines labour group, the National Union of Mineworkers is seeking hikes of more than 60%.

In 2014, a strike by workers ceased most of the operations of three biggest platinum producers for five months and finally it was concluded when companies agreed to increases their wages by as much as 35%.

Following the NEC Lekgotla meet, held from 24 to 26 July African National Congress secretary general Gwede Mantashe said: "South Africa remains a mineral driven economy, based on amongst others industrialisation through beneficiation and foreign earnings.

"Those companies that have already announced possible retrenchments are called upon to review their plans and avoid massive job losses as such would lead us further into crisis."