NEWS & ANALYSIS

Malema's call will cost jobs on mines - James Lorimer

DA MP says demand for mines to be made ungovernable will further deter investment

Julius Malema's bid for power will increase unemployment

Julius Malema's attempt to ‘make mines ungovernable' will only make a volatile mining industry even more highly charged and will lead to job losses. The fact that this may happen quietly and over time, in the form of new investments that are not made, does not make it any less certain (see here).

There are currently 500,000 people employed in the mining industry. Diminished investment will mean less inflow of new money that mining constantly requires to maintain itself and to grow. That means some jobs will end when mines close and will not be replaced. That's on top of the jobs that are not created because new projects cannot be funded.

Some South African mines are doing relatively well at the moment, but they need to do better than average in order to offset the perceived risk of increased government pressure, either from nationalisation or new resource rent taxes.

The killings at Marikana have merely increased this risk, and while Malema's criticism of a leadership vacuum is accurate, his prescription to make mines ungovernable is self-serving and destructive.

Statement issued by James Lorimer MP, DA Deputy Minister of Mineral Resources, August 31 2012

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