As South Africa’s mining industry flounders amid closure of shafts and worsening job losses, the Bench Marks Foundation (BMF) is calling for the repurposing of affected areas and communities to put them on a sustainable footing.
Massive retrenchments, especially in platinum mining, where loss making shafts are being mothballed, have rocked South Africa over the past few months. There has also been rapid closure of some gold mining shafts, with reduced investment into exploration across the mining industry, posing further uncertainty to one of the country’s key economic pillars.
The Bench Marks Foundation told Business Report in an interview that there were increased instances of dying and ghost towns in South Africa as a result of the closure of mines and retrenchments of mining workers.
Anglo Platinum, Sibanye-Stillwater and Impala Platinum are among those that have announced retrenchment exercises at their South African platinum group metals operations.
David van Wyk, the lead researcher at Bench Marks Foundation, said, “The BMF has long pointed out the decline of large scale industrial mining in South Africa. We are seeing mining towns dying in front of our eyes in the Free State, North West, Gauteng and Mpumalanga.“
Most of the abandoned South African gold mines have become havens for illegal mining activities by zama zamas, with surrounding communities tipping into related-crime sprees.
South African miners complain of the high cost nature of mining in the country as ore bodies are now much more deeper, making it dangerous to reach the resource.
According to Van Wyk, “What remains of gold in South Africa is too expensive and risky for it to be mined” profitably.
“This has resulted in mine abandonment, growth in informal settlements and growth in unregulated artisanal survival mining by zama zamas,” he said.
Allan Secombe, the spokesperson for the Minerals Council of South Africa, has previously told Business Report that local “coal miners are also at risk as this sector is facing a double-whammy of lower prices and Transnet rail woes”.
Making the situation worse was a dearth of investment into exploration activity across South Africa’s mining industry. This has been worrisome for the Minerals Council of South Africa, especially with the country’s share of exploration expenditure remaining stubbornly below 1%, a fraction of what it was two decades ago when it was more than 5%.
It is the communities that are suffering the most from the ill fortunes of mine closures, retrenchments and suppressed commodity prices for some key and traditionally lucrative metals such as platinum, says Bench Marks Foundation.
It wants these formerly lucrative and thriving towns to be repurposed to unlock sustainable livelihoods for those laid off and affected by mine closures.
“The Bench Marks Foundation has called for such mining towns and even mine sites to be repurposed and reengineered towards sustainable post mining economies. This could be done in terms of a sustainable inclusive just transition to alternative energy and Artificial Intelligence economics,” said Van Wyk.
Mining is still a key export earner for South Africa though, helping the African economic powerhouse to avoid recession in the final quarter of 2023 after it notched up marginal growth of 0.1%.
However, with headwinds for the mining industry remaining elevated, epitomised by port and rail inefficiencies as well as electricity load-shedding, there is current uncertainty on whether in future the mining sector will continue to play a major role in South Africa’s economy.
To survive the mining downturn, some communities have resorted to “infrastructure stripping,” especially “in towns unable to pay for services such as water and electricity,” said Van Wyk.
“The stripping and of existing mine infrastructure including roads, railway lines, clinics/hospitals, training facilities, sport and recreation facilities should be protected and become part of the reengineering/repurposing sing process,” he explained.
Bench Marks Foundation, which blames the Transnet and harbour problems on the stripping of rail to port infrastructure, reckons that until the scrap metal industry is strictly regulated and managed, and unemployment is dealt with, South Africa will likely “be stripped down” to nothing.
BUSINESS REPORT