S.Africa mining sector could see increased mechanising - CNBC Africa

S.Africa mining sector could see increased mechanising

Southern Africa

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“I think in the backdrop of all of this as well is the prospect of increased mechanisation in our mining, going the Australian model route, yes it's expensive but if one adds up the costs of all of this rolling mass action and the associated loss of revenue then the prospect of increased mechanised mining as a model becomes more realistic,” Healy, a labour analyst at Tony Healy & Associates, told CNBC Africa on Tuesday.

The mining industry is preparing itself for the start of wage talks in the gold sector this week in an attempt to end the wave of wildcat strikes that has crippled the sector in the past 18 months.

Mining companies, however, have stated that they simply can’t afford double-digit increases.

“I think at the end of the day the economics will dictate where the parties end up. I think executive pay will also feature because there’s great concern around social consciousness. The gold price has dipped significantly, we were in a different set of circumstances the middle of last year,” said Healy.

“I’m sensing a hardening of position regarding the mine companies themselves. They’re saying we simply cannot continue to condone the kind of industrial actions we saw last year. Yes the prospect of mass dismissals is not something that’s particularly palatable but on the other hand neither is the kind of rolling, mass action that we saw.”

This wage negotiation season has shown more uncertainty than in the past and Healy argues that the future of mining in South Africa could see anything happen at this point.

“The fact that we have essentially a labour intensive mining model is because of the fact that our labour costs have been relatively inexpensive and as that becomes more problematic, it becomes more palatable and acceptable to contemplate mechanised mining,” he said.