The Impact of the 2008–2009 Global Financial Crisis on Employment Creation and Retention in the Platinum Group Metals (PGMs) Mining Sub-sector in South Africa

Abstract

The main objective of this chapter is to investigate the impact of the 2008–2009 global financial crisis on the employment creation and retention in the South African Platinum Group Metals (PGMs) mining sub-sector. Desk-top literature review and analysis approach was employed for the study. The crisis led to slow-down in platinum demand and price. The slow-down might have resulted from changing consumption behaviour of major platinum consumers such as the US and Euro Zone who were greatly affected by the events of the global crisis. There were massive job losses and inability of the platinum sector to create any new jobs during the crisis as a result of the slow-down of crucial Foreign Direct Investment (FDIs) into the South African economy. Subsequently, standard of living amongst mine-workers dropped and this lead to increased demands of higher wages and other benefits. The wage negotiations became volatile and characterised by antagonisms leading to the fateful events of the Marikana massacre. Government should seek to improve and increase macroeconomic stimulus packages amongst potential investors to encourage inflows of FDIs. Personal bonuses payable to mine bosses should be curtailed during this period of economic volatility to avoid instigating labour unrest and increased demands for benefits.