South Africa ‘needs new leadership’ – with thousands of jobs on the line

 ·28 Apr 2024

Sibanye Stillwater CEO Neal Froneman says South Africa desperately needs new leadership that is more business-friendly, as the private sector is essential in creating employment.

As reported by the Business Times, Froneman said that the South African mining industry is facing an existential threat.

Although a new mining cadastre system is being introduced, which should improve the mining and exploration licence system, Froneman believes that the new system will not matter much to investors.

He said that investors are constantly threatened with expropriation without compensation and nationalisation of mines, meaning that a new system will do very little to sway sentiment.

He said that “investment is on strike” despite claims from Cyril Ramaphosa that investment is flowing into the country.

Most investment by the private sector is into renewable energy to provide power for themselves amid heightened load shedding, while there is not enough capital investment in fixed assets and growth that will create jobs.

He added that South Africa desperately needs new leadership and to be more business-friendly, as the private sector is good at creating employment, which is essential in addressing poverty and inequality.

Job cuts

Amid a challenging operating environment, Sibanye has been cutting thousands of jobs in South Africa.

In February, the group said that it laid off 2,600 employees from its loss-making operations to ensure the sustainability of its South African PGM operations.

Earlier this month, the group said that it was looking to cut another 4,000 jobs in South Africa and entered into Section 189A consultations.

The 4,000 job cuts are part of a plan to restructure its gold operations and Southern Africa region services functions.

Capitec CEO Gerrie Fourie said that the mining sector, unlike many other parts of the economy, will likely see increased retrenchments over the coming months.

Source: Capitec

Sibanye recently recorded an R37.9 billion loss after taking an impairment against its US palladium mine.

Froneman said that, on top of the escalation of poor government, the falling PGM prices have had the single largest impact on its business.

Although Coronation believes that the PGM sector is not going to turn a corner due to the rise of electric vehicles, Froneman believes that the cycle will change in the next 6 to 12 months as interest rate cuts will increase demand for internal combustion engine (ICE) vehicles.

PGMS are essential for catalytic converters in ICE vehicles, as they reduce harmful emissions.

Read: Pension warning for workers in South Africa

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