Platinum strikes: Two months into starving negotiations

By IAfrica
In South Africa
Mar 25th, 2014

The platinum producers on Tuesday said the “unprecedented” strike would have dire consequences. “The financial cost – now close to R10 billion in revenue lost, and around R4.4 billion in earnings lost to employees – does not tell the full story. Mines and shafts are becoming unviable; people are hungry; children are not going to school; businesses are closing and crime in the platinum belt is increasing. Overwhelmingly, we are being told by employees that they wish to return to work, and we need to collectively find a way to ensure that they are able to exercise their right to do so,” said the three CEOs of Amplats, Implats and Lonmin in a joint statement. “We note a number of AMCU assertions regarding various historical inequities of the mining industry. We believe that many steps have been taken towards remedying them over the years, but we also acknowledge that more needs to be done.”

The CEOs warned AMCU that large-scale structural changes would ultimately lead to job losses. “Sadly, as the industry progresses towards greater mechanisation and higher skill levels, which are aligned with higher earnings and greater productivity, so the number of people employed in the industry will decrease.”

Spokesperson Charmane Russell elaborated on the CEOs’ comments. The Chamber of Mines estimated in 2013 that about 45% of the platinum sector was not profitable and costs continue to rise. “It stands to reason, then, if during a year of relatively good production, 45% of operations were not profitable, then the situation will be worse now. I am afraid we cannot be more specific than this. But there is no doubt that the longer the strike endures, the more fundamental the restructuring will be,” said Russell. While the shafts are closed non-striking staff and fixed costs must still be paid. Then it’s estimated that 30% of underground work areas will need significant rehabilitation, which can take weeks to get ready for mining. “And, in some cases, this may not make economic sense,” says Russell.

Asked about information regarding the impact on families and businesses, Russell says the companies have received calls from struggling employees daily and they will soon provide an update on the comments received. “Information from municipalities is that people are not paying for services; feedback from school principals is that school fees have not being paid,” says Russell. “The mines themselves have noted a significant increase in theft and attempted theft from mine properties. We have been told by the SAPS that crime in the region has increased substantially.” As the platinum producers have been saying all along, the situation could get worse. “Job losses as a consequence of possible closures is a reality. The industry has already seen significant decreases in employment in the past two years. This is a reality that employees need to be aware of.”

Amid the mounting number of demonstrations supporting AMCU’s demands, a women’s march in Marikana delivered a memorandum to Lonmin on Sunday calling for the R12,500 demand to be met. The women were also concerned about the high level of crime now in the area and the blame put on striking workers, who they said were not responsible for the illegal activities. “We are dying of hunger,” read one woman’s placard. “Ben Magara [Lonmin CEO] you have the power to change this,” read another.

Meanwhile, Cosatu has joined the chorus calling for an end to the strike. North West provincial secretary Solly Phetoe says the federation of trade unions has been inundated with calls from employees who want to work because their families are suffering. “Most of children whose fathers and mothers are on a prolonged strike cannot go to school due to not being able to pay for the transport and meeting the other requirements of their children at school,” says Phetoe. Cosatu wants government to convene a meeting between stakeholders to consider the effects of the strike. It’s also calling on mining companies to issue a security plan to protect non-striking workers. If no plan is forthcoming within a week, Cosatu will march to the mining houses in North West.

Russell says the companies have tried to provide security where possible, such as at Amplats where areas have been set aside for “safe passage” to and from work. The problem is, security cannot be provided for workers at home. Implats closed all operations to avoid potential violence.

As part of the ongoing discussions between the state, labour and mining companies, Deputy President Kgalema Motlanthe will convene a meeting this Thursday which will include the platinum producers and AMCU. Speaking to Reuters, his spokesperson Thabo Masebe said the meeting was scheduled regardless of the strikes. It’s likely, however, the industrial action will be discussed; Motlanthe may be able to help break the deadlock. On the one hand, he can listen to AMCU’s concerns about government and sympathise with its grievances over the the mining industry. Speaking at a mining lekgotla last year, the Deputy President slated the industry for failing to improve “archaic practices” and the ongoing system of migrant labour, a “scar on the face of democratic South Africa”. On the other hand, he shares an interest with the mining houses in needing to get back to work and keep the economy running.

While negotiations with AMCU have shown no signs of progress, the National Union of Metalworkers SA (Numsa) provided a glimmer of hope last week by accepting increases between 7.5% and 8.5% at Amplats. CEO Chris Griffith lauded the union, government and the CCMA for working together, “which allows us to build a sustainable future.”

Currently, there are no direct discussions between AMCU and the platinum producers. The companies say they want to engage, but only if AMCU moves to a “reasonable settlement range” says Russell. The union’s leaders weren’t available to comment on Tuesday. Its chief negotiator Jimmy Gama declined to comment, saying we should call AMCU president Joseph Mathunjwa, who was unavailable. Early in March, AMCU revised its demand of an immediate R12,500 basic wage, asking for the figure to be reached over three years. CCMA discussions ceased after the revision, with platinum producers still offering between 7.5% and 9% increases. DM

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Photo: A miner sits inside a one-room shack in Sondela township in Rustenburg. January 30, 2014. REUTERS/Siphiwe Sibeko

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