South Africa’s President Jacob Zuma surprised the nation Wednesday by replacing mineral resources minister Ngoako Ramatlhodi, amid planned layoffs by mining companies and an ongoing rout in commodity prices.
Ramatlhodi, who was moved to the public service and administration ministry, is being substituted by Mosebenzi Joseph Zwane, a former official of the Free State provincial government in departments ranging from economics to agriculture, Reuters reports.
Given that ousted minister Ramatlhodi is considered the main person that helped end a five-month strike in the country’s platinum sector last year, analysts and mining executives are questioning Zuma’s decision.
“We feel very strongly that the president should have maybe waited and seen Ramatlhodi pulling through to 2016,” Association of Mineworkers and Construction Union’s President, Joseph Mathunjwa, said in an interview with local radio station Talk 702.
Chamber of Mines chief executive Roger Baxter said he appreciated Ramatlhodi’s openness to tough and frank conversations intended to achieve the best for the industry.
And the National Union of Mineworkers (NUM) praised Ramatlhodi for forcing Glencore’s Optimum Coal mine to close after a supply dispute with state power utility Eskom, and “sending a message” to mining companies that they had to follow the rules.
South Africa, the world’s largest producer of platinum, relies on mining for more than half of its exports and the industry employs about 440,000 people. But the country’s mining sector is facing a crisis as prices for the precious metal used mainly in catalytic converters to reduce emissions have dropped to six-year lows, forcing miners to slash costs.
Impala Platinum Holdings (JSE:IMP)(LON:IPLA), the world’s second-largest producer of the metal, plans to cut as many as 1,600 jobs in South Africa at its Rustenburg mine, northwest of Johannesburg, according to Bloomberg.
Lonmin (JSE:LON)(LON:LMI), the No. 3 platinum miner, is planning as many as 6,000 staff cuts while over 400 managerial and supervisory positions will be eliminated at the world’s largest platinum producer Anglo American Platinum (Amplats).