The Mining Industry Association of Southern Africa (MIASA) said on Tuesday that 70,000 jobs have been lost in Southern Africa’s mining sector, and more may follow, owing to falling commodity prices.
“MIASA notes with concern, the large scale retrenchments in the region as a consequence of depressed commodity prices on international markets. The mining industry has lost approximately 70,000 jobs across all commodities,” the association said in a statement.
Last month, mining companies in South Africa informed the government plans to sack 32,000 workers. Already, Platinum producer Lonmin has sacked over 5,000 and Kumba Iron Ore, 3,933, among others. MIASA expects more people to lose their jobs across the southern African region.
Commodity prices have fallen to their lowest levels since the global financial crisis. The price slump is linked to a glut on the market as demand drops due to slowing growth of some of the major commodity buyers such as China and Brazil.
Chief Executive Officer of mining giant Anglo American Plc., Mark Cutifani blames the mining industry for the current price situation. He told a mining conference on Monday that cutting supply in line with decreasing demand may not make sense for some producers whose major focus is maintaining market share and driving competitors out of business. But this “strategy generally has a net negative effect”. Prices have thus remained low and Cutifani believes this may continue for some time. Mining companies are left with no other choice than to cut down spending by reducing production and downsizing.
“A further 50,000 employees face the risk of losing their jobs if something drastic is not done urgently,” said MIASA. MIASA represents chambers of mines from Botswana, Democratic Republic of Congo, Madagascar, Namibia, South Africa, Tanzania, Zambia and Zimbabwe.