"The closures and decline in production are having severe economic and social implications as yet more jobs are lost along with tax revenue and credibility among foreign investors," he says.
Baissac warns that the growing numbers of mine closures pose a threat to an industry confronted with a global economic downturn, rising production costs and unceasing policy uncertainty. Recent closures of mines should be a "penny dropped" moment for the country's leadership, he says. "A new mining deal focused on productivity and investment is an imperative for the industry, for tens of thousands of jobs, for entire communities, and for the country."
Overwhelming reasons for the slowdown in the mining industry, Baissac says, include inflation-beating costs and infrastructure bottlenecks evident in power, transport and water. Fractious labour relations and administered mine closures for safety, as well as administrative inefficiency in the Department of Mineral Resources and uncertainties over future ANC policies, combined with growing concerns over corruption. The reality is, he adds, that these factors have cost the country both the first and the second commodity boom. The government and the ANC should realise that the South African mining industry is a "sunset proposition", both geologically and politically, Baissac concludes.
Read the full article