Cape Town, South Africa — MININGREVIEW.COM — 24 June 2009 – The South African mining industry has been hard hit by sharply lower commodity prices due to the global economic downturn, and is currently under a severe strain.
Making this statement here, minister of mineral resources Susan Shabangu said analysts had forecast that the sector could lose more than 100 000 jobs this year owing to the crisis. “Nevertheless,” she told parliament in her budget vote speech, “a government-led process to save jobs has paid off.”
She said the mining sector was under severe strain, but “we have sown the seeds of a resilient economy,” she added.
“The aggregated commodity prices of minerals produced in the country lost some 40% of their value, while job losses were constrained to less than 25 000, representing about 5% of total employment in the industry,” she said.
Shabangu added that she was keenly following consolidation in the mining sector. Before her speech to parliament, she told reporters the government opposed a possible merger between Xstrata and Anglo American Plc.
“We are keenly watching these developments to ensure, among other things, that such consolidation does not take us back to the age of anti-competitive practices, that there are no job losses and to ensure that they do not affect market principles,” she continued.
On mine deaths, Shabangu said earthquake monitoring systems needed to be reviewed, after two workers had died after a tremor at a Gold Fields mine in the past weekend.
Shabangu’s cabinet counterpart Dipuo Peters – who heads the energy ministry – said an internal threat to the country’s mines still existed because the country was battling an energy crunch.
Also addressing parliament, Peters said power supply was still vulnerable, but that the global downturn had eased electricity demand and helped Africa’s biggest economy cope.
“We are far from being out of the woods. In fact, was it not for the economic downturn, we would be load-shedding,” Peters told parliament. She said the country had the potential to save up to 30% in power use through energy efficiency.
Caption, Pic 1: Diamonds – one of many commodities suffering plunging prices in the current economic downturn.