South Africa needs migrants to resuscitate its ailing economy

South Africa needs migrants to resuscitate its ailing economy
  • Africa's most industrial state was already at the precipice of a fiscal cliff before the pandemic
  • Activity is expected to contract by 7.1% this year – the deepest contraction in a century 
  • Government forecast the economy to contract as much as 16.1% this year
  • There’s increasing pressure for a rapid turnaround in mining
  •  The mining sector contributed 8% of gross domestic product last year.

South African mines to return more than 14,000 foreign workers

South Africa’s gold and platinum miners are racing to bring back thousands of skilled migrant workers, and their skills are key to rebooting the nation’s mines.

For almost 150 years, South Africa’s deep-level mines relied on cheap labor from neighboring Lesotho, Eswatini, Mozambique, and Botswana. Fast-forward 2020, they still account for about 10% of the industry’s 450,000-strong workforce whose skills are requisite to rebooting the nation’s mines.

Producers are tasked with huge logistics operations to bus thousands of migrant workers back from their homes, with precautionary means to safeguard employee’s health and avert a virus outbreak on the mines.

What makes migrants so important?

South Africa's economy has taken a hit during the COVID-19 pandemic, leaving the majority of the country's population frustrated as the future looks increasingly uncertain.

Migrant workers provide critical skills to the country’s gold and platinum mines

 “You can’t just throw anybody else on the job,”

said Stewart Bailey, executive vice president of corporate affairs and investor relations at Johannesburg-based AngloGold Ashanti Ltd.

 “Those are all skilled people, trained and very experienced.”

With the government forecasting the economy to contract as much as 16.1% this year, there’s increasing pressure for a rapid turnaround in mining, one of the nation’s biggest exporters.

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Photo by Juan Jose Porta @unsplash

What actions have been implemented to expedite results?

The producers have contracted labor consultant TEBA to transport 14,000 foreign workers back to the mines.

Buses are carrying half their normal capacity to ensure social distancing, according to Graham Herbert, managing director of BETA.

“I have worked in the industry for 30 years and I have not seen anything like this,” Herbert said. “This is a historical first for me. This is probably the biggest movement of labor, certainly, in gold and platinum mining, that’s been known.”

Herbert is under pressure to expedite the relocations as skilled labor shortages curb mine output, even after companies were allowed to return operations to full capacity at the beginning of June. The biggest mining companies currently have about 23,000 foreign workers outside South Africa.

Foreign migrant workers domiciled in Eastern Cape and KwaZulu-Natal, face travel restrictions and mandatory quarantine which will impede the goals to expedite output in the mines. According to Johan Theron, a spokesman for Impala Platinum Holdings Ltd. Foreign migrant workers are key, he said.

“The most skilled and experienced workers are predominantly from those areas and that’s true for the entire industry,” Theron said. “We can’t just return them without putting in place extraordinary measures.”

With some workers coming from virus hotspots, companies are also booking them into hotels to meet isolation requirements.

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Is Government pressured to open borders amid COVID19

South Africa may be forced to be lenient on travel restrictions as mining companies have made a clarion call for the government to reopen more border posts with Mozambique and Lesotho to speed the transit of returning workers.

“The volumes of workers that are going to come through is such that we want more borders to be opened,” Lesufi said. The disruptions could curb mining output by between 13% and 20% this year, the council said.

“Bringing back people over an extended period of time and with limited virus testing capacity, it would be crazy to imagine there won’t be a significant impact on production,” said Theron of Implats.

With the official tally at over 50,000, South Africa has recorded more coronavirus cases than any other country in sub-Saharan Africa. The number of deaths has now surpassed 1,000.