South African mining companies that have diversified globally are confronting a skills shortage as other industries lure scarce expertise and local skilled staff emigrate.
Lee-Ann Samuel, Impala Platinum's group executive: people, said this week workers were looking for jobs that brought more meaning to their lives, particularly after the pandemic.
“The new Generation Z is thinking differently about the work environment and mining is not as attractive as it used to be, so the challenge for us is how we bring sexy back into mining and make it an attractive industry, because with the dynamic nature of skills today you can be a mining engineer but work in banking. So we have to think about and develop strategies to attract a new generation into the workplace.”
A global skills shortage, particularly in Canada, has been a risk for Impala.
“We have seen a global shrinkage in critical mining skills. Skills are becoming increasingly scarce and more expensive. In Canada we have had high attrition in our critical roles for some time, almost close to 30% of turnover. But we have abated that through a retention strategy.”
She said the skills shortage in South Africa was a result of socioeconomic conditions.
“There has been a brain drain. Our professional critical skills in mining are leaving to go to other countries. Our approach is internal leadership development and building strong pipelines and investing in our people. Retaining skills has become more challenging and we continue to focus on the retention of talent,” she said.
Our professional critical skills in mining are leaving to go to other countries
— Lee-Ann Samuel, Impala Platinum group executive
Sibanye-Stillwater said this week it had implemented incentives to attract and retain skills at its US platinum group metal (PGM) assets.
Charles Carter, Sibanye's head of the Americas region, said during a results presentation this week that the company's Montana assets had been battling a skills shortage all year in a tight US labour market, where the unemployment rate was 3.4% nationally and 2.8% in Montana.
“We have had to manage through the year a high employee turnover. On average the turnover was 18% across the business in Montana in 2022.
“More importantly, in important job categories and in key roles in the operation you see a 24% miner turnover, a 20% mechanics turnover, a 24% supervisor turnover, a 25% geologist turnover and a 24% planner turnover. That is not an issue we are complacent about. It is a reality of our work mining in the US.”
Sibanye is positioning itself to be a provider of strategic metals for green technologies, while Harmony Gold Mining Company has increased its copper exposure through the acquisition in December of the Eva copper project in Australia.
The turnover in geologists at Sibanye’s operations in Montana in the US.
— IN NUMBERS: 25%
Lithium, copper, nickel and cobalt are some of the metals used in battery storage in the shift towards reducing greenhouse gas emissions.
Harmony CEO Peter Steenkamp said the acquisition of Eva Copper was in line with the company's strategy and a feasibility study was due to be completed before the end of the year.
Makhosi Nyamela, equity research analyst at FNB Wealth and Investments, said merger and acquisition activity for the mining sector would be driven largely by the transition to a lower carbon economy.
“The transition of the motor vehicle drivetrain from internal combustion to electric will have a net negative impact on long-term demand for commodities such as platinum group metals, which dominate portfolios of South African mining companies,” Nyamela said. The transition would result in higher demand for battery metals such as lithium and cobalt.
“We think it’s a logical step for gold producers like Harmony to increase their copper exposure considering its geological occurrence alongside gold. Sibanye has a stated strategy to invest in these transition metals as shown by their recent investments in lithium, nickel and now discussions to acquire copper.
“South Africa does not have notable deposits of these transition metals, with the exception of exploration and development projects in the Northern Cape. South Africa produces copper and nickel as byproducts in the PGM mines,” Nyamela said.
Seleho Tsatsi, investment analyst at Anchor Capital, said diversifying was one way for companies to mitigate the risk of overdependence on one commodity or commodities that have demand drivers in common.
“It also allows companies to gain exposure to commodities with perhaps more attractive long-term demand-supply outlooks. It’s also a way for companies to diversify their geographic exposure. So, it’s a way to diversify by commodity, by demand driver and by geography,” he said.
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