Mining companies have informed the mines ministry of intentions to cut about 32,000 jobs as prices decline, Mineral Resources Minister Mosebenzi Zwane said.
“Commodity prices have fallen for quite some time and that is causing problems in term of jobs and restructuring,” he told reporters in Pretoria on Thursday. “We are engaging with companies to try and see how best we can deal with that situation in a responsible way.”
Anglo American Plc’s Kumba Iron Ore unit is the latest producer to announce potential job cuts, saying it plans to reduce its staff and contractors by about 3,900 after prices for the steelmaking ingredient dropped almost 40% last year.
Plunging commodity prices are adding to pressure on an industry struggling with regulatory changes and unreliable power supplies, and some of the country’s biggest mining companies are threatening to cut jobs.
Mining accounts for more than half of the nation’s exports and employs about 440,000 people, a critical source of jobs in a nation with a 25% unemployment rate.
The department will seek to mitigate job cuts by transferring workers to other mines, re-skilling employees and asking companies if they can cut costs in other ways, Zwane said.
“Where there are job losses, we’ll put in mechanisms to deal with that situation,” he said. “We’re going to do everything possible in our power to try and control the situation until the price of commodities improves.”
Section 52 of the country’s mineral resources law obliges companies to inform the minister if 10% of a workforce or more than 500 people are likely to lose their jobs in a year.