Mining houses shed 2 500 jobs

Mining houses shed 2 500 jobs

l Belt-tightening to continue

l Workers told to brace for salary cuts

Livingstone Marufu

Mining companies, the majority of which are smarting from plummeting commodity prices on international markets, last year shed more than 2 500 jobs, bringing the total number of workers that have lost their jobs in the past seven years to 13 300.

The sector hopes the staff cull will help mining houses contain costs and improve viability, especially at a time metal prices are trekking southwards.

China, the world’s largest commodities’ consumer, is grappling with slowing economic growth that has adversely affected global demand for minerals.

The Asia Development Bank forecasts that China’s economy will grow 6,5 percent this year and 6,3 percent in 2017.

Subdued prices for base metals like aluminium, copper, lead, nickel, tin and zinc are blamed for most Zimbabwean mining job losses between 2009 and 2015.

The Chamber of Mines of Zimbabwe expects cumulative export earnings to drop more than US$50 million in 2016.

And as mining companies tighten purses, workers are likely to bear the brunt. Chamber of Mines CEO Mr Isaac Kwesu indicated in a recent report that companies were likely to continue retrenching or at least maintain salaries at current levels.

“Most miners have mentioned viability challenges, mechanisation or transition to capital-intensive system of production as their main reasons for retrenchments.

“Due to feasibility challenges facing the industry, most mines appear struggling to pay the wages, with 12 percent of the respondents having applied for exemptions in 2015.

“All mining houses (100 percent) interviewed said that they will not afford any salary increments in 2016, while 22 percent reported that they have negotiated and agreed salary reductions with their employees in 2015,” said Mr Kwesu.

Most companies believe they will be able to break-even if they rein in wages, high cost of consumables, expensive power tariffs and unsustainable fiscal charges.

But mine workers continue to push for salary reviews, notwithstanding a marginal 1,5 percent hike effected last month and backdated to January.

The minimum wage in the sector was reviewed from US$248 to US$251,72 per month. Workers say salaries are still far below the poverty datum poverty line, which stands at about US$500.

Conversely, employers are pushing for a reduction in wages in view of the collapse in global mineral prices.

“Despite the problems in the mining sector most companies are carrying out human development programmes for their employees this year in a bid to improve to enhance technical aspect of an ordinary mine worker,” said Mr Kwesu.

Overall, mineral exports are forecast to retreat from US$1,85 billion last year to US$1,8 billion in 2016.

Though other minerals and metals foresee declines, gold exports are expected to rake in US$772 million this year from US$737 million in 2015, with output increasing by four tonnes from a year earlier to 24 tonnes.

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