Unemployment and Mining Sector in South Africa

11 April 17
South Africa Mining Project

Out of the various socio-economic challenges that continue to perplex South Africa, unemployment or youth unemployment happens to be on top of the list. Cross-country comparisons always point out to the fact that South Africa’s unemployment rates are among the highest in the world. The unemployed youth of South Africa are identified by certain common characteristics, the major one being their lack of employability.

A lot of socio-economic factors are responsible for the unemployment scenario of the country. The youths have very low levels of education as they have dropped out of school and therefore, do not have either the literacy and numeracy or the communication skills needed in the labor market. The lack of work experience further aggravates the situation; they do not have the network or the capital that can bring them closer to prospective job opportunities. Even when there are opportunities in other areas, mobility becomes a problem due to an absence of sufficient financial resources.

Even in such grim employment scenario, the only streak of positivity comes from the mining industry in South Africa, which has been playing a pivotal role in eradicating unemployment of late. Alongside, mining, for the last 150 years, has been functioning as the driving force behind the economy with the mining industry shaping the country’s cultural as well as socio-political development.

South Africa’s total mineral reserves are estimated at $2.5 trillion, with the mining sector contributing 18% of GDP and over 50% of foreign exchange earnings. The sector brings in an annual income exceeding R330 billion and accounts for 20% of all investment in the country. As pointed out by the Mining Intelligence Database, the mining and its related industries employs over one million people thereby spending approximately R78 billion in wages and salaries. The best part of employment opportunities offered by mining is that it provides work for unskilled and semi-skilled people. This group of people suffers the most from unemployment across South Africa.

Not only does mining contribute towards creating employment opportunities, it also paves the way for overall economic improvement of the country. The South Africa mining projects, undertaken by reputed organizations like Atha-Africa Ventures, work towards Black Economic Empowerment and environmental management.