1. 1 BACKGROUND TO RECENT JOB TRENDS IN MINING JUNE 2015

2. Background to recent job trends in mining Presentation prepared for the Portfolio Committee on Mineral Resources Martin Nicol and Nkosinathi Kweyama – Parliament 03 June 2015 2

3. Outline How many people work in mining? What are the latest trends in employment? Mitigation measures in place Why are jobs under pressure?: economic context Outlook for jobs 3

4. OTHER Manganese Chromite Diamonds Iron ore Co al Gold PGMs How many people work in mining?

5. Latest trends in employment? Total industry employment in the mining sector dropped to 493 000 from 508 000 during the 2013-2014 financial year 5 Mine job losses in 2014Jan-2014Dec-2014Job lossPercent fall Gold (labour in service)122 800117 372-5 428-4% PGMs (labour in service)192 431191 206-1 225-1% TOTAL industry499 000492 000 -7 000-1%

6. Recent announcements 6 CompanyCommodity EmploymentJob cuts LonminPGM present employment 35,000  Possible job cuts 3,500 Anglo American Platinum PGM (biggest employer)  Job cuts 474 (more possible) HarmonyGold present employment 34,686  Doornkop restructuring may cost 3,000 jobs – 29 May;  400 job cuts announced (Masimong – 11-May);  1 271 jobs cut in Feb-15 (Kusasalethu) SibanyeGold employment 36,274  430 jobs cut in Feb-15

7. Mitigating the impact The loss of jobs is distressing It undercuts the predicted increases in mine employment in the National Development Plan But mining is always prone to fluctuations Mining has a tradition of negotiation around economic realities Strong provisions are also there in the law – in the Labour Relations Act and the MPRDA 7

8. MPRDA A social and labour plan (SLP) has to be in place for every mine in South Africa This has to provide for managing and sharing the burdens of “downscaling and retrenchment”. Every mine has to have a plan for downscaling, just as every mine has to have a plan to spread the benefits of mineral wealth more widely when it is profitable. 8

9. Why are mining jobs under pressure?: The economic context Wold Economy still Recovering from 2008 GDP Growth in 2014 (3.4%) expected (3.5%) in 2015 (IMF) Chinese growth has decelerated (7% vs 10%) EU showing marginal improvement (0.4%) US shrank (-0.7) Major trading partners growth not convincing 9

10. Outlook for jobs in mining Chinese, EU and US PMI (50,52 and 51) Positive outlook require (Moody's) PMI to exceed 55 for three consecutive months (China, EU and US) IMF GDP world growth forecast of 4% Given current conditions labour market in the industry is expected to remain tight Depreciating local currency support local industry 10

11. Jobs Outlook for Gold mines 2015 to 2025: Chamber of Mines 11 Present employment 119,000 106,000 80,000 68,000 Need to replace employment lost in gold with new mines in other sectors: need for more investment and for exploration.

12. References Aboobaker, S. (2015) Amplats puts 474 jobs in firing line. Business Report. 30 April. Chamber of Mines of SA (2015) SA gold, today and tomorrow fact sheet: wage negotiations for the gold industry 2015. 29 May. Department of Minerals and Energy - GNR.527 of 23 April 2004: Mineral and Petroleum Resources Development Regulations (as amended). Department of Mineral Resources (DMR) (2014q) Labour In Service - Summary – Monthly: Period From: 2014:01, Period To: 2014:9. PRELIMINARY (Directorate: Mineral Economics December 2014). DMR (2015c) Minister concerned at rate of retrenchments at mining companies. Media Statement. 12 May. DMR (2015q) Labour In Service - Summary – Monthly, Period From: 2014:01 To: 2014:12 PRELIMINARY. (Provided to the Research Unit by email 30- Mar-15). Faku, D. (2015b) NUM, gold producer stand-off in the wings. Business Report. 13 May. Faku, D. (2015c) Chamber trashes charter report. Business Report. 15 May 2015. Faku, D. (2015a) SA mining sector bleeds jobs. Business Report. 11 May. Harmony Gold Mining Company Limited (2015) Harmony restructuring for profitability. [Internet]. 08 May. Harmony Gold Mining Company Limited [Internet].. Janse Van Vuuren, A. (2015) Implats and Lonmin in union talks on closures. Business Day. 7 May. Mantshantsha, S. (2014) Sibanye Gold enters consultation process to boost productivity. Business Day. 12 September. McKay, D. (2015a) Tribunal gives nod to Sibanye Cooke 4 restructure [Internet] Miningmx. 20 April. McKay, D. (2015b) Harmony confirms restructuring at Doornkop. [Internet].. 29 May. McKay, D. (2015c) Implats calls off Marula sale, looks to expand. [Internet].. 27 May. National Planning Commission (2012) National Development Plan 2030: Our Future – make it work. Nicol, M. (2013) Transformation in the mining industry: social and labour plans. Research Unit, Parliament. 13 May. Parliament (2015) Committee shocked by retrenchment of 474 mine workers. Media statement issued by Parliamentary Communication Services on behalf of the chairperson of the Portfolio Committee on Mineral Resources, Mr Sahlulele Luzipo. 30 April. Parliament. Committees. (2013) Report of the Portfolio Committee on Mineral Resources on the public hearings on the Mining Charter, dated 5 June 2013. ATC130607. Available at: [Accessed 18 June 2013]. Ramatlhodi, N. (2015) Minister of Mineral Resources 2015 budget speech. 7 May. 12