Mine shafted in minister's blitz

05 August 2015 - 02:04 By Graeme Hosken, Katharine Child, Shaun Smillie

Mineral Resources Minister Ngoako Ramatlhodi is cracking down on mining houses for alleged bad labour practices. But experts fear it will speed up the death of the ailing industry.In the past two months Ramatlhodi has issued 400 notices - 100 of them last week - to mining companies not complying with labour and mining regulations.The latest casualty is Glencore's Optimum Coal Mine, which was ordered to shut down yesterday. It had allegedly failed to follow proper practices when it embarked on retrenchments.Glencore refuted this.Advocate Mahlodi Muofhe, an adviser to Ramtlhodi, said last night that the minister was well within his legal right to intervene."The department regulates the industry and if there are issues created by any mining house that are not in line with the law, we are entitled to issue such notices."These notices, which are not notices of suspension, ask for explanations so that we can engage with the companies .and corrective steps can be taken," he said.The message was that, whereas in the past mining benefited from exploiting workers, profits would not be made at the expense of workers' rights, Muofhe said."The minister does not take kindly to workers being treated as less than human. He doesn't compromise on this."But labour economist Andrew Levy was critical of Ramatlhodi's hard line."This is not knee-jerk action: it's both knees and both elbows," he said.Muofhe declined to name the 400 companies that had been issued with notices."The minister is urging all stakeholders in the mining sector to abide by the law so that he is not compelled to do what he has done to Optimum," he said."Though the suspension will affect jobs, it's important to weigh the interest of the workers."Glencore said it had complied with all legal requirements for the retrenchment process and consulted intensively with the government and unions.But the largest union at the mine, the National Union of Mineworkers, said the company had not followed proper procedures, including a social labour plan.According to Glencore, of 1067 employees expected to be retrenched, about 359 had, in fact, had their employment terminated.Another 267 had opted for voluntary severance packages and 86 had been deployed to other Glencore operations.The Optimum mine supplies coal to the Hendrina power station in Mpumalanga and there are concerns that constraints on the power grid will be exacerbated by its shutdown.Energy analyst Chris Yelland said having to source coal from other mines could be more expensive for Eskom. "Optimum mine supplies coal to Hendrina through a conveyor, which is the cheapest way to transport coal. If they have to transport coal by road, this will be significantly more expensive."Eskom spokesman Khulu Phasiwe said it was renegotiating contracts with its suppliers of coal."Glencore at the moment does not form part of [the negotiations] although at a later stage it might."The company had indicated a desire to renegotiate its contract, he said.Phasiwe said that Glencore had not informed Eskom that the mine was being closed.Azar Jammine, chief economist at Econometrix, said more jobs would be lost if the "unhelpful interference" of the government continued."Our mining industry is gradually disappearing This kind of action will speed up the disappearance," he said."Mining has been the worst-performing sector over the past two decades."Jammine said this was one of the sectors of the economy that had the potential to absorb unskilled people in large numbers."The problem in killing off the mining industry is that it is making it more difficult for people without skills to find jobs in the country," he said.Labour economist Levy added that Ramatlhodi's moves sent the wrong signal to investors overseas. "It is barely a push away from nationalisation. Why use administrative power when you can approach a court if there is a dispute about what is labour law?"..

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