Illegal mining killing critical South African industry

Barberton Mines, one of the operating mines for JSE-listed Pan African Resources, plans to retrench over 240 employees after its operating costs became unsustainable due to increasing theft.

On Tuesday, 20 May, Barberton Mines announced that it has found itself in the unfortunate position of having to retrench workers.

The company said this is due to operating costs at some of its business units having become unsustainable over an extended period.

The retrenchment process commenced in February 2025 and involved several stakeholders, including organised labour, the Department of Mineral and Petroleum Resources (DMPR), Traditional Authorities and the municipality. 

The process was also facilitated through the CCMA. The company explained that this was a joint consensus-seeking process agreed upon by all stakeholders involved.

“We have endeavoured to implement numerous and ongoing interventions to improve productivity and to ensure the sustainability of Barberton Mines for the long term,” the company said.

However, it explained that increasing gold theft alongside the associated increase in security costs has significantly impacted the mine’s business.

It said this theft was often committed by the mine’s employees, and through collaboration with illegal miners, aided and abetted by sections of the community.

“We have warned employees and stakeholders many times that the current situation is not sustainable, and the most affected by illegal actions is our local communities,” the company said.

“Barberton Mines’ positive impact on our local communities is well known – we are the largest employer in the region, without us, the local economy would collapse, and illegal mining will devastate communities.” 

Therefore, it said the retrenchment of the identified workers was unavoidable and will enable the mines to operate sustainably, and continue to contribute to their stakeholders over the long term. 

“However, we need our employees and communities to understand that illegal mining is killing the industry, and we are not immune to further cuts should the situation deteriorate any further,” the company said.

The retrenchment process

Initially, the company identified 980 positions to be retrenched, although this has been reduced to 244 through redeployment, a joint consensus-seeking consultation process, and voluntary severance and retrenchment packages.

Barberton Mines directly employs around 3,759 employees and is the largest employer in the region.

The company explained that Barberton Mines’ management implemented numerous operational processes to restructure the operations to mitigate losses before embarking on the retrenchment process.

This included full calendar operations, infrastructure enhancements, improved security technology and other cost-saving measures and efficiencies. 

“These challenges were discussed with our employee future forums as required by the legislation to explore potential solutions,” it said. “This did not yield results over a period of some three years.”

Thereafter, the company said it entered into intensive consultation processes since the announcement was made to employees on 11 February 2025.

“The stakeholders agreed, through the joint consensus seeking process, that the plan of action instituted by Barberton Mines is justified,” it said.

During the consultation process, parties discussed the method for selecting which employees will be retrenched, in accordance with the requirements of section 189 of the Labour Relations Act.