In a normal democracy, platinum strike would be over – Peter Major
One of the things I really like about Peter Major is his ability to succinctly say exactly what needs to be said. In this interview, he gives a quick and apt takedown of a proposed solution to the ongoing platinum strike that would involve the police protecting those miners who wish to work. As Major correctly points out, if there was any political will to end it, the platinum strike would already be over. The reality is that the tripartite alliance between the ANC and South African labour unions means that government is unwilling to intervene in the strike, and that platinum mining companies can expect no aid from that quarter. Their only realistic hope remains to persuade the unions that they cannot afford dramatic wage increases, and to win workers over with a vision of a thriving South African platinum sector. The prospect of this happening seems ever-more remote. – FD
ALEC HOGG: South Africa's output of platinum group metals went down by more than third. Unsurprisingly, that's the most in two years because of the strikes, which are now into their 11th week, which have crippled the world's three biggest producers on the western limb of the Bushveld complex. We'll be talking in just a moment to Peter Major who is from Cadiz Corporate Solutions. Indeed, what is unusual for us is that you're not in the studio with us today, Peter. You're talking to us on the telephone. It shows you just how important the whole platinum sector is in our minds at the moment. There was a listing yesterday – Tharisa – you know the Pouroulis family's record better than most people do, I guess, in South Africa. The share price is down today. Do you buy the story that they listed because they had to and it's offering value?
PETER MAJOR: They are calculated right now Alec, because there are many things that have to happen for that value to be reflected. One is that they have to get their recoveries up, which they admit are below plan, and they showed us all the reasons on the mine visit, how they're going to get those recoveries up. Another thing is that production has to get up to 100 percent seven days per week and not just 100 percent five days per week if you're meant to run seven. I must say, when you tour the place you think you're on one of the original Anglo American operations. The Pouroulis family has been here for a long time. Lucas was one of the pioneers of helping to sink Western Deep levels, which is still arguably, the most impressive underground mining project, which, probably, the world has ever seen. He's had some hard knocks, but he stayed with it. Right now, you have most of the large mining houses pulling out. They've lost a lot of that expertise and Lucas has it, so we were rather impressed with the operation, from metallurgy, all the way through the mill, all the way through the mines and in its organisation.
GUGULETHU MFUPHI: Peter, with Tharisa being an opencast mechanised mine, I gather the prospects are more positive for it than for other players.
PETER MAJOR: Yes and no. Look, I'm anti open pit because it's too dependent on some large expensive imported machinery. It's too dependent on the diesel price, and you don't have the flexibility with the big open pit that you do underground. When you use your men productively and effectively, underground mines have much more flexibility and adaptability to volatile metal prices to enable it to higher-grade etcetera. That said, an open pit mine – when the metal price is high enough – they just run. As we've seen in this country, high manpower operations don't just run. Management's time and focus is now 80 percent on non-mining issues, whereas with an 80 percent open pit it's still focused 80/20. It's mainly the machines moving the rocks, so you can put 80 percent of your time on the machines and the mines. In addition, you do have more dilution with open pits. That's why he has to get his recoveries up.
ALEC HOGG: Peter, we have Loane Sharpe from Adcorp coming in, in just a little while, and he has some radical ideas about how to address the strikes, which are continuing in the platinum sector. He reckons that the companies should now make a final offer, call in the cops, make sure that those people who do want to come back to work, can, and that those who don't want to are prevented from hurting those who are back on the shift. Do you think something like that (a) is viable and (b) will be listened to?
PETER MAJOR: If you're operating in a genuine democracy, everything Loane is saying should have happened three months ago. However, if you're operating in a phony democracy where you have a tripartite at the top really making the decisions, then it's not as easy and viable as Loane has laid out. I've said all along, that if government wanted the strike to end…if they really thought PGM, which are our number one export…if they really thought that was a strategic metal, they could have legally and democratically ended the strike three months ago, because it is an illegal strike. If a Tripartheid agreement that allowed specific labour legislations, which is undemocratic, to be put in place of parliament instead of making them adhere to all the rules, such as open ballot and freedom to choose work etcetera. Loane is therefore correct if he's assuming he's in a normal and genuine democracy.