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The planned retrenchment of 13 000 workers by Impala Platinum at its Rustenburg operations could not have come at a worse time for the platinum-endowed town.
The dust has barely settled following the platinum belt strike four years ago and the municipal coffers are looking healthy, with at least R100 million in reserves saved up over the past year.
This is the picture one gets when chatting to the mayor of Rustenburg, Mpho Khunou, during an early morning interview at his eighth-floor office in the municipal offices in Rustenburg this week.
Khunou said while the municipality has been very concerned about the economic dependence on mining, plans were under way to change the DNA of the local economy.
“We have excessive dependence on the mining sector, it makes up about two-thirds of our gross geographic product and we are trying to diversify,” he said.
He added that a developmental blueprint plan, called the 2040 Rustenburg Master Plan, was drafted in line with the National Development Plan.
Before the platinum boom the town’s livelihood was anchored on agriculture, but that sector now contributed a mere 2% to the local economy. Khunou said mining did not kill agricultural input despite claims the sector had “sterilised” the arable land in most cases.
He said the looming retrenchments by Impala and possibly thousands more by Lonmin come at a time when the municipality is trying to use mining to grow other sectors such as tourism and agriculture, and attract R10 billion in investment over the next 10 years.
Though the mine-rich economic hub of the North West province is attempting to rely less on mining, the pinch the municipal coffers felt during the five-month Association of Mineworkers and Construction Union strike in 2014 is something that it would not want to go through again.
Khunou said in the 2014 strike, municipal rates payments in the areas around Impala plummeted to 60%, a clear indication that a lot of the households could not cope.
The current rate of rates payment is 85% and it has an overall budget of R5.5 billion.
The entire population of the municipality is around 700 000, has a 27% unemployment rate which is the national average and, Khunou said, unlike other municipalities in the province, the town generates revenue largely from internal streams such as electricity resales, water as well as rates and taxes.
Khunou said the municipality supported Mining Minister Gwede Mantashe’s suggestion of the “use it or lose it” principle.
“We welcome the stance taken by the minister that if Impala cannot mine profitably, let it give other smaller players an opportunity to mine,” he said.
Mantashe had previously said that government was considering implementing the use it or lose it principle for mining houses that opted to retrench workers and close shafts.
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