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South Africa Mining Under Pressure

South Africa Mining Under PressureSouth Africa Mining Under Pressure

The global commodities slump is hitting the emerging economies hard, including South Africa. The rainbow nation is dependent on the sale of raw materials. A quarter of the entire country’s economic output comes from the mining sector.

South African President Jacob Zuma shuffled his cabinet Wednesday, moving his mineral resources minister, Ngoaka Ramatlhodi, to the public service and administration portfolio amid plunging commodity prices and planned job cuts. Mosebenzi Joseph Zwane replaced Ramatlhodi and was sworn into office in the capital, Pretoria, according to Reuters.

Ramatlhodi is replacing Collins Chabane as public service and administration minister. Chabane was killed in a car accident in March. Ramatlhodi was appointed to the mines post in May 2014 amid a five-month platinum strike, the longest in the history of South Africa’s thriving mining sector, and he “showed mining companies that he is a custodian of our minerals,” Association of Mineworkers and Construction Union President Joseph Mathunjwa told Bloomberg Wednesday.

South Africa, the world’s leading producer of platinum, relies on mining for more than half of its exports, and the industry employs about 440,000 people. But the country’s mining sector is facing a crisis as platinum prices have plummeted to six-year lows. Impala Platinum Holdings Ltd., the world’s second-largest metal producer, plans to cut as many as 1,600 jobs in South Africa at its Rustenburg mine, northwest of Johannesburg.

Lonmin Plc, the third-biggest producer, is planning as many as 6,000 staff cuts, while as many as 420 managerial and supervisory positions may be eliminated at Anglo American Platinum Ltd., the largest producer. Atlatsa Resources Corp. may trim its workforce at the Bokoni mine in northern Limpopo province by 10%, according to Bloomberg.

Financialtribune.com