Enoch Godongwana yesterday stated that his party will ignore ratings company advice and call for an increase in mining taxes, revealing the government's indifference to the loss of jobs. This will simply lead to further job losses in a sector already debilitated by policy uncertainty and waning investor confidence.
A report released yesterday by Deloitte Touche Tohmatsu placed South Africa 12th out of 20 countries that mining companies intended investing in over the next 20 years, despite sitting on $3.5 trillion worth of mineral reserves. Deloitte Touche Tohmatsu forecasts that only $3bn will be invested in the South African mining industry over the next 19 years, compared to $55bn in Australia and $33bn in Brazil.
In the six months leading to November, 3 332 jobs were lost in the South African platinum sector alone. The latest StatsSA figures show a loss of 8 000 jobs to the end of September across the industry. At a ratio of at least 10:1 dependents on mining jobs, roughly 80 000 people have been negatively affected this year alone.
Mining production is currently at its lowest in 60 years, predominantly a function of policy uncertainty in the run-up to Mangaung. The ANC wants a mineral resource rents super-tax of 50% and an export tax on raw materials. Godongwana claims that increased taxes are necessary to prevent revolt. But exactly how making an industry less profitable - causing it to shed more jobs - will prevent revolt, is not clear. The reasoning is backwards.
Real people's jobs are being put at risk and the opportunity to create more jobs is being squandered. The government should crack down on the flakier fringes of Luthuli House to reverse this trend, although this would actually require them to lead.
James Lorimer, Shadow Minister of Mining