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Employment in South Africa's Gold Mining Industry

By John MaynardCommoditiesJan 10, 2019 16:09
za.investing.com/analysis/employment-in-south-africas-gold-mining-industry-200198035
Employment in South Africa's Gold Mining Industry
By John Maynard   |  Jan 10, 2019 16:09
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We take a look at the formal number of employees in the gold mining sector as measured by the Quarterly Employment Statistics (QES) published by Statistics South Africa (Stats SA). And the numbers clearly show an industry in decline, and which seems unable to arrest the continued decline in employment in the industry.

How many employees in South Africa's gold mining industry?

Once the pride and joy of South Africa, and the main driver behind one of the wealthiest cities in Africa, Johannesburg, the gold rush saw thousands upon thousands flock to South Africa and Johannesburg all looking for fame and fortune on the gold fields of the highveld. But sadly over the last number of years as gold lost its shine and importance as store of value for investors, the gold mining industry in South Africa has been on the decline. Not only are South African gold mines becoming to expensive to mine profitably (due to labour unions and their high wage demands, deep mines becoming unsafe to mine without heavy investments in underground safety, and a electricity source in ESKOM which is unreliable and expensive).

In an effort to save the gold mining companies and shore up their balance sheets, mining companies have had little choice but to get rid of some of their workforce. And this brings us to employment in the gold mining industry. The line graph below shows the number of employees in the gold mining industry per quarter from September 2009 all the way to September 2018. And its not a pretty picture.

Gold Mining - Employee Chart
Gold Mining - Employee Chart

In September 2009, there were 160 117 people working in the gold mining industry. By September 2018 the number was sitting at 98 226. That's a decrease of 61 891 employees (or a decline of 38.7%) in the last 9 years. So roughly 6 876 people lose their jobs each year in the gold mining industry. That is 573 people being let go in the gold mining industry in South Africa every month. So how does this compare to the rest of South Africa's mining and quarrying industry? Is the whole mining and quarrying industry in South Africa in a similar decline to that of the Gold mining industry?

The line graph below shows the total number of employees each quarter in the mining and quarrying industry (excl Gold mining). And as readers can see the trend in employment is totally different to that of the Gold mining industry. It does seem like the Gold mining industry is the bad apple in this case.

Employees in Mining Industry
Employees in Mining Industry

Sadly the detail published by Stats SA is not detailed enough for us to identify which sub sectors of the mining and quarrying industry is contributing to the growth in employment, as they only break it down to Gold mining and non gold mining, but if we had to venture a guess we would say the bulk of the employment increases in this sector belongs to the coal mining sector which is now the main commodity export in South Africa, beating both Gold and Platinum. As the demand for coal from India keeps fueling growth in South Africa's coal mining industry. This while ESKOM claims there is not enough coal in South Africa. Yet we export billions in Rand value, and millions of tonnes to India every year.

Employment in the Non gold mining industry increased from 327 015 employees in September 2009 to 358 570 employees by September 2018. That's an increase of 31 555 employees, or 3 506 a year or 292 new non-gold mining employees each month. Sadly the employment gains in the non-gold mining industry are not enough to offset the loss of employment in the Gold mining industry.

While government, unions and companies attempt to stem the flow of job losses in the gold mining industry in South Africa, one has to wonder if they are all trying to catch a falling knife? Perhaps its time to let this industry go, and for government to focus on creating employment elsewhere, such as the Tourism industry.

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Employment in South Africa's Gold Mining Industry
 
Employment in South Africa's Gold Mining Industry

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