Relations between South Africa’s government and the mining industry are unraveling as a commodity-price rout derails plans by President Jacob Zuma’s administration to create millions of jobs and pare a 25 percent jobless rate.
Mining companies in South Africa, the world’s largest platinum and manganese producer, plan to fire as many as 10,000 workers at a time when the economy is struggling to rebound from the slowest expansion since a 2009 recession.
A public slanging match has ensued between senior politicians opposed to the layoffs and executives who say their stance, together with prolonged uncertainty over mining laws and an unreliable power supply, threatens their companies’ survival. Gwede Mantashe, secretary general of the ruling African National Congress, last month branded companies as “lazy” for firing staff rather than considering alternatives.
“I don’t think the government understands the gravity of the challenges in the industry,” Mzukisi Qobo, a politics lecturer at the University of Pretoria, said by phone on Wednesday. “What happens in this industry sends signals to foreign investors across a range of other sectors on how government treats big business.”
The chief executive officers of Anglo American Plc and Sibanye Gold Ltd., the largest miner of gold in South Africa, have pushed back against the government in a rare display of public criticism by businesses.
Prices Plunge
Sibanye CEO Neal Froneman said on Aug. 6 that mining companies are “tired of political comment instead of concrete actions,” and that the government didn’t understand the economic realities of running a business.
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