“Welcome back,” said the sign at the end of the strike. This bitter dispute ended with smiles and handshakes under Christmas lights at the mine gate.
On June 25, across the platinum belt near Rustenburg in the North West province of South Africa, 120 kilometers north of Johannesburg, around 70,000 miners went back to work. The Association of Mineworkers and Construction Union (Amcu) reached a wage settlement the day before with platinum producers Lonmin, Implats and Angloplats.
“It is our sincere hope that our companies, our industry, our employees and all stakeholders will never again have to endure the pain and suffering of this unprecedented strike period. None of us, nor the country as a whole, can afford repetition,” says Ben Magara, Lonmin CEO, after the union signed a three-year agreement.
At one of Lonmin’s mines in Marikana, hundreds of mineworkers walked in darkness to clock in. Their supervisors and bosses formed a guard of honor to welcome them back. But production was far away in the first weeks of the return. Miners were inducted and went through health checks before setting foot in the shafts.
“Previously, mining companies just put their workers back to work straight away. That’s not Lonmin, we are not here for the quick and short term solutions. We’re for a sustainable business with the interest of the person at heart,” says Mark Munroe, Lonmin’s mining division and safety head.
Lonmin says it could be six months before full production is reached.
Munroe says from the beginning of the strike, Lonmin invested in mine maintenance to protect the shafts from damage and keep ventilation working. Engineers have also been hard at work managing water underground.
“We shut down with the cognisance it will go on for a long while. In fact, we put extra mine support in place. We put plans in certain configurations so that we wouldn’t need so much maintenance and check-ins. All the water was stored,” says Munroe.
The separate agreements reached with each company are effective from July 1, 2013 for Amplats and Implats and Lonmin on October 1, and will run until June 2016. Employees with basic salaries less than $1,126 a month will receive a $94 increase over three years.
“This victory ushered a paradigm shift in the entire mining sector. This also shifts the media mindset that our demands were ridiculous,” says Amcu president, Joseph Mathunjwa, after signing the agreement.
Mathunjwa says they have established a task team that will look at worker share ownership. This means miners could own part of the mines they closed for five months.
Former Anglo American strategist, Clem Sunter, supports this.
Sunter says Kumba Iron Ore, a subsidiary of Anglo American, has an employee share ownership scheme which since December 2011 paid out gross dividends to employees of more than $56,000.
“The shares won’t stop strikes but they will reduce the odds that they will go on strike for a long time. It is a step towards a more inclusive economy,” he says.
“The worker shareholder scheme is a very good idea that needs to be encouraged because it could change their lives for the better. It will give workers a meaningful stake from the company revenue,” says Andrew Levy, a labor economist and consultant at Andrew Levy Employment.
Levy says if the workers wishes are granted, it will be prudent to familiarize them with economic literacy to understand the share price of their companies.
“Workers will think carefully about going on strike because they are directly benefitting in the economy,” he says.
The mine owners hope so.

Painful And Costly Strike Ends With Glee And Hope

By mid-June, as FORBES AFRICA went to press, there was no sign of an end to the longest mining strike in South African history. For five months, Lonim, Implats and Angloplats – which produces 40% of the world’s platinum – lay idle at a cost of more than $2 billion to the economy.
New mining minister Ngoako Ramatlhodi tried to heal the rift in his first few days in office, but fresh talks fizzled out inside two weeks.
May proved a month of tragedy, farce and scorn in the platinum belt of South Africa. Tragedy as 4,000 hungry women and children of miners turned up for 500 food parcels; farce because of Lonmin’s clumsy attempt to end the strike and scorn from most of the miners.
Lonmin issued an ultimatum for miners to report for duty on May 14 and offered to charter buses. Instead, more than 4,000 Association of Mineworkers and Construction Union (Amcu) members gathered at the nearby Wonderkop Stadium, carrying traditional weapons.
Lonmin claims a few slipped past the strikers to work, but police say there were none.
Regardless, Amcu president Joseph Mathunjwa gave assurances to the traditional weapon wielding miners that their jobs were safe in the protracted strike. He accused Lonmin management of undermining the union by talking directly to employees.
“We have the law on our side. The employers have breached the recognition agreement signed between them and Amcu, the majority union in the platinum sector… Don’t allow them to instigate you to the point you do unlawful things,” Mathunjwa warned.
He rubbished allegations his members were responsible for the attacks on the non-striking miners around Rustenburg. Four people died, several others suffered stab wounds.
Mathunjwa further warned that the police deployment to the platinum belt could lead to another Marikana massacre. In August 2012, at least 34 Amcu protesters were shot dead by police in Marikana.
“If the strike is protected and lawful, why is the government deploying police. To do what?” asks Mathunjwa.
“We are so close to Canaan, there’s no way we are returning to Egypt,” says Jimmy Gama, the union’s national treasurer.
A few kilometers from the stadium, where Mathunjwa left in a fleet of luxury vehicles, the central business district of Marikana painted a gloomy and desperate picture. Many businesses have closed since the miners downed tools on January 23.
On May 19, Lonmin management called journalists to their headquarters in Melrose Arch, Johannesburg, they looked and sounded desperate.
“We are asking who is benefitting from the strike. Are the rising incidents of violence not making the strike dysfunctional?” says Lonmin CEO, Ben Magara.
On May 20, platinum bosses and the union met again at the Labor Court in Johannesburg, stripped to the waist and ready to fight each other over whether employers should directly communicate with their employees or not.
Despite the presiding judge, Hilary Rabkin-Naicker, managing to get the two parties back to the negotiating table, no agreement was reached after a week.
“Reaching an affordable and sustainable agreement with Amcu would be in all of our interests, and that remains our preference. We remain committed to on-going dialogue with Amcu and other stakeholders to find a way to end the strike. The companies welcome the intervention of the Labor Court,” says a statement from Lonmin management before the wage impasse.

Sad Days Of Tragedy, Farce  And Scorn

In a continent desperate for jobs, it is depressing to watch a once shining industry commit suicide. By May, it had cost the industry around $1.5 billion in production and a lot of credibility in the world market.
As I write, the platinum industry in South Africa has been on strike for nearly four months. More than 70,000 workers at Lonmin, Angloplats and Implats, which produce 40% of the world supply of platinum, are idle. The industry has all but closed for business thanks to an unsightly game of poker between the management and the Association of Mineworkers and Construction Union (Amcu). The last time South African mines were idle for this long was during the Rand Revolt of 1922 when striking white miners fought soldiers through the streets of Johannesburg over plans to replace them with cheaper, black miners.
Nearly a century later, Amcu, the union representing the great-grandchildren of those black miners, wants the minimum wage to be more than doubled to R12,500 – that is around $1,200 a month. It called the strike on January 23 and is not going to call it off until the magic number is reached. In many ways, the survival of Amcu – which is trying to eclipse the old school National Union of Mineworkers (NUM) – hinges upon securing this demand.
The employers say no way. Wages make up more than half of platinum mining costs and the mines say they can’t afford it; they offer 9% and no more. The word in the industry is that the employers see this as a showdown and will not budge. Other employers in gold and coal look on nervously, fearing similar wage demands from their workers should the platinum employers cave in.
Amcu risks an exodus of its new found membership if it backs down.
It is a staring competition where there is only one certainty – the platinum industry will emerge much smaller and weaker. The analysts are talking about 20,000 job losses before the end of the year, even if the dispute is settled soon, with thousands more to follow. The employers will close marginal shafts and whole operations could shut up shop.
What a pity. For years, platinum has been the blue-eyed boy of the South African mining industry. It earned high prices on the world spot market. The advantage platinum enjoys over gold is that it is actually used and consumed, rather than sitting on the shelf of a bank vault. It goes into catalytic converters in cars, helps keep the air clean and is valuable in jewelry. This means it has always enjoyed better prices than gold.
But it appears the boom times for platinum may be over. The employers have drawn a line in the sand and will try to salvage what is left of the industry when this dispute is over.
Funnily enough, the strike has not had the drastic effect on price that many feared. The spot price appears to have remained fairly stable, despite the fact that this damaging strike has taken more than a million ounces out of the market.
Some analysts even believe that this strike will help getting supply and demand back into equilibrium. Oversupply was one of the big issues last year, as the car industry slowed down, and there were stockpiles built up, hence the fairly constant price. These stockpiles are running down, as the strike wears on, and employers are already warning customers that a dearth is on the way.
Job cuts are inevitable in platinum. The industry may be able to right itself ahead of the next spike in platinum demand.
But the damage to the image of the industry is likely to be deep and long term. Foreign investors will view the labor unrest with distaste and caution. The strike is likely to make any investor think twice before putting money into South African mining. It will also damage South Africa’s reputation as a solid supplier of platinum.
The South African government appeared ineffectual in its attempt to intervene and solve the dispute. In the run up to the elections, it appeared to have forgotten about the king sized problem of a shutdown of the platinum industry all together. Now it is re-elected for another five years, surely this is a time for action.

Tag: Implats

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Painful And Costly Strike Ends With Glee And Hope

Sad Days Of Tragedy, Farce And Scorn

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