By Lehlohonolo Lehana.
Mineral and Petroleum Resources Minister Gwede Mantashe has expressed concern over the recent retrenchments in the mining platinum sector.
This follows Sibanye-Stillwater move to cut over 11,000 jobs from its workforce over the last year and a half.
Sibanye-Stillwater CEO Neal Froneman says “the future of Stillwater remains in the balance. It’s as simple as that. If there is no correction in price, as strategic as it (the mine) is, we will have to put it on care and maintenance, “he said at the London Indaba conference earlier this month.
Stillwater, which produces palladium and platinum, was one of the first of Sibanye-Stillwater’s operations to be restructured. In November the company cut about 287 employees including 187 contract workers at the mine.
A year earlier Sibanye-Stillwater delayed an expansion of Stillwater to 700 000 ounces a year.Then it abandoned the expansion, and set a production target of between 440,000 to 460,000 oz for the 2024 financial year.
However, Froneman has been reluctant to shut Stillwater. “The good news is we are Ebitda positive at Stillwater,” he said.
“We are not cash flow positive, but we won’t close it. If you think taking out 400,000 ounces (in annual PGM production) out of the market … no, it’s not happening. It’s too strategic,” he said. One concern for Froneman is the optics of cutting jobs in a country where it’s proposing to build a lithium/boron mine (Rhyolite Ridge).
In response to these job losses, we have pulled our social partners together and are in discussions to craft an approach to minimise them,” Mantashe said, delivering the Department of Mineral Resources and Energy’s Budget Vote in Cape Town.
He said significant progress has been made by the National Energy Crisis Committee (NECOM) and National Logistics Crisis Committee (NLCC) who have formed partnerships with industry players to improve the state of infrastructure to support mining.
“The department is currently drafting amendments to the Mineral and Petroleum Resources Development Amendment Act (MPRDA) aimed at ensuring that areas that have been identified as weak and those that have been challenged legally are strengthened against international best practice.
“The amendments will also review the licensing regime to reduce red tape and improve the business environment for investors while keeping in sync with South Africa’s social and economic fabric,” Mantashe said.
He said the amendments are a continuation of the regulatory and policy adjustments initiated during the sixth administration.
“Given South Africa’s endowment with considerable mineral reserves of strategic significance to the global economies, we are convinced that increased exploration will enable the country to meaningfully benefit from its global advantage.
“To enable this the department, guided by the country’s exploration strategy, has in partnership with the Industrial Development Corporation (IDC) established an exploration fund to support emerging and junior miners,” Mantashe said.
Government intends to intensify engagements with several fund managers and the investor community to secure additional financing to sustain the fund into the future.
The department has allocated R72 million to fund artisanal and small-scale miners, including women and youth-owned companies.
Mantashe said the health and safety of mine workers remains at the centre of government’s work.”Owing to our strategic partnership with our social partners we have improved our performance towards the zero harm goal,” he said.
The Minister said this is demonstrable in the decline in mine fatalities, injuries and occupational diseases as evidenced by the 49 fatalities being the lowest on record in 2022.
“Although we had set our sights on beating this record in 2023, the regrettable disaster at the Impala Rustenburg that killed 13 mineworkers and many other fatal incidences contributed to the regression resulting in 53 fatalities reported in 2023.
“We have also noted with great concern the emerging trend of fatalities related to motor accidents and disasters involving illegal miners.
“To this end, the department has entered into an agreement with the industry on the development of minimum standards and guidelines to mitigate against road fatalities, while intensifying the fight against illegal mining,” the Minister said.
In the 2024/25 financial year, the department has been allocated at least R8.84 billion, of which R6.4 billion is earmarked for transfers to public entities, municipalities, and other institutions or implementing agents.