South Africa's Mining Woes Continue

Wednesday, 22 January, 2014

And the Lonmin saga rolls on! Their employees are downing tools this morning after wage negotiations with the Association of Mineworkers and Construction Union failed over December. The company appear to be suffering a surge of bad karma, as the past two years have seen the tragedy of Marikana, Union based in-fighting amongst staff, accusations of ‘greenwash’ and lying in their CSR reports, and persistent labour disputes.

The strike will affect the other two platinum producing companies, Anglo American Platinum, and Impala Platinum, who’s workers are also walking out today; the former company having their good news of returning to profit dashed by this turn.

All three companies released statements earlier this week, reaching the same conclusion: “a strike will not benefit workers”. With platinum prices falling since their peak in 2008, jobs have been lost, and companies have been restructuring; yet the paradox of such restructuring becomes apparent in these situations. As a company cuts back in order to save costs and restore profit, the consequences can lead to strikes such as today, which have a counter-productive effect.

The AMCU is considered to be a more hardline union than the other major union in South Africa, the National Union of Mineworkers (NUM): the former asking for much higher wage increases than the latter. Yet it has now become the dominant union in the platinum industry, whilst the NUM still dominates the other minerals companies. Much of South Africa’s mining woes have come from a power tussle between the two, despite their recorded desire to coexist.

All three companies noted that they reached an agreement with the NUM for a 7.5% to 8.5% wage increase over two years, but grieved that the doubling of wages that the AMCU are demanding are impossible; Anglo American pleaded:

“we appeal to the union and to our employees to understand that the company simply cannot afford the increases that the unions are currently demanding. A strike will impact negatively on employees, their families, communities, our company and the country as a whole”.

It’s unclear how long the strikes will last, but it seems the usual course will take place, with a game of ‘chicken’ ensuing between capital and labour as to who will cede first. After what happened at Marikana, it is reaffirmed at CSR21 in agreement with Lonmin et al. that during the strike ‘peace, order and stability is maintained at all times’.