Johannesburg — SA's mining sector could shed about 100000 jobs in the next year as mining output is expected to fall 20% in the wake of the global financial crisis, according to a report by Southern Africa Resource Watch (SARW).
Rising poverty in SA could mean more outbreaks of violence, especially after last year's xenophobic attacks, SARW director Claude Kabemba warned yesterday.
Deloitte conducted its latest study, the effect of the global financial crisis on mining in southern Africa, which examined the mining sector in eight countries in the fourth quarter of last year and the first of this year.
Kabemba said at a presentation on the report that original forecasts were that the mining sector would invest about 75bn globally this year, but the figure fell to 25bn. Next year, global mining investment would have been 175bn but it was now expected to be 60bn.
Their dependency ratios, meaning the number of people supported by each job, ranged from about 3,3 times in SA to 17,8 times in Zimbabwe, where 80% of the population was unemployed.
Each country had been affected differently by the global downturn, depending on its main resources. For example, economies with more gold and uranium were doing better than those reliant on diamonds or copper.
One of the problems with Zambia's mining industry, Kabemba said, was that it was almost entirely in private hands. Countries where there were public-private sector partnerships in mining were better able to find solutions to the crisis.
In numerical terms, the biggest job losses had been in SA and the Congo, Snyman said.
The Congo employed 2,5- million people, mostly artisans, in mining last year, accounting for 37% of total employment. Up to the end of the March quarter, 200000 jobs had been lost because of a low copper price and mining companies' inability to raise finance to develop their projects. Deloitte expected 7% of the Congolese population would be affected by the contraction in the sector this year.
The report showed a close correlation between gross domestic product growth in China and in Africa since 1999 as the two countries have become increasingly interdependent. China-Africa trade came to 110bn last year.
Pieter Snyman, China-Africa specialist at the Gordon Institute of Business Science, said that while Chinese exports had suffered in the financial crisis, China appeared to have resumed buying commodities this year to satisfy domestic demand and rebuild stockpiles. This could have a positive effect on Africa in the next couple of years.
