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Task team to ease crisis impact on mining

Lonmin’s Limpopo
platinum mine – one
of several mining
operations facing
job losses
Johannesburg, South Africa — MININGREVIEW.COM — 03 December 2008 – South Africa has formed a special task team to investigate and offer ways to stem the job cuts which have been triggered by the global financial crisis that has sent metal prices plummeting and put 10 000 jobs at risk.

Reuters reports that a special meeting has been held between the Department of Minerals and Energy, the Chamber of Mines representing big mining houses, and the mineworkers’ unions, to try to lighten the impact of the current economic crisis on the mining sector.

“Our aspiration was to have a moratorium adopted at the meeting to prevent job losses, but mining houses said they were losing money already, and things could get worse if they didn’t cut their costs now,” said National Union of Mineworkers (NUM) general secretary Frans Baleni. NUM is the country’s largest mineworkers’ union.

Baleni said the team would look at ways to try to stave off the worst of the impact of the credit crisis on mines, and to help the industry prepare for the time when commodities rise again. It would meet again in less than a month.

According to Reuters, the unions fear that South Africa’s mining industry – a key contributor to the country’s economy and a major employer – will shed more jobs than it has already.

Some mining firms have only scaled back output and put the brakes on new mine expansions at this stage, and Baleni said the gold sector had not been hurt as much as platinum producers.

The world’s No.3 platinum producer Lonmin plans to cut 5 500 workers at its South African mines, citing weak demand for platinum from car makers, the biggest users of the metal. The metal has fallen more than 40% this year.

Canada’s Uranium One plans to lay off 1 013 workers at its shut down Dominion uranium mine, and London-listed Petra Diamonds Limited is looking to lay off some 350 workers at its Helam mine.

DRDGOLD plans to cut 1 700 jobs from its shut ERPM mine because it cannot raise the required cash to pay for a new water pump, while Simmer & Jack may shed 500 workers at its Buffelsfontein Gold Mine if it fails to meet output targets.

Reuters reports that these job losses would be a big setback in South Africa as it seeks to tackle its 23% unemployment rate.