MBABANE – As South Africa sees a host of international companies shut down or downsize their local operations, the mining sector is making a clarion call to government.
This exodus has been attributed to a volatile macro environment, a weak Rand, a feeble economy and a gross domestic product (GDP) growth of less than one per cent. The departure of these international firms affects Eswatini. The country’s exports to South Africa were E2.09 billion, while imports from South Africa were E2.46 billion, depicting a heavy reliance on the neighbouring country for trade.
This reliance also affects Southern Africa Customs Union (SACU) receipts. The companies also provided job opportunities for emaSwati.
The mining sector, which provides many of these jobs, has also seen major companies shut down. Among these is African Rainbow Minerals (ARM), which will permanently close its Cato Ridge Works (CRW) operations, resulting in the retrenchment of all affected employees on August 31, 2025. The online publication, IOL, reported that ARM’s Malaysia business is also being sold.
The CRW joint venture between ARM and Assmang employed about 600 people. ARM stated that a structured consultation process in accordance with Section 189 of the Labour Relations Act had been completed. Diversified mining resources group Glencore also closed two ferroalloy smelters in South Africa. Magomba Coal Mining Chief Executive Officer (CEO) Wandile Hlatshwayo said the closure of the smelters had slowed down the lifting of ordered material. “As a small company, we have seen some of those who had ordered delaying in placing their set volume of orders,” Hlatshwayo said.
To deal with the current challenges, he said Magomba Coal Mine has diversified its marketing in order to close the delay. He also expressed optimism that the smelters will get favourable incentives from Eskom, as the high electricity cost is a major contributor to their shutdowns.
Meanwhile, the Magomba Coal Mine’s CEO said as much as the closure of South Africa’s mines was negatively affecting the mining sector in the interim, there was an opportunity for local companies to consolidate their exports and also diversify local products. “This can afford local mining companies an opportunity to consolidate their stock and sell it abroad. The limitation is the waiting period for payments as payment is only made when the ship has sailed,” he said. For the sector to stay afloat, Hlatshwayo said support from government was needed. He said the support could be availed through a variety of incentives such as tax rebates, fuel levy and import duties, among others.
The Magomba Coal Mine CEO said government can review the incentives based on the performance of the sector as the current situation is public knowledge.
His assertions were also supported by an economist who said government must save itself by intervening in the mining sector or it will fail to finance the national budget.
The economist said government should come to the rescue of the sector by exempting it from certain obligations that are set to deplete its resources.
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