Gideon du Plessis: Mining strike pains. Is half a bread loaf better than none?

Every couple of years the South African mining sector braces itself for a new wave of strikes as unions negotiate worker’s wages. This year Sibanye Gold and the platinum sector are set for the negotiating table. 2014 saw a five-month long platinum strike, which Solidarity’s Gideon du Plessis is hoping won’t be repeated. And while the commodity price crisis is a cause for concern, Du Plessis says the negative impact of the strikes are still being felt by workers, businesses and surrounding communities. Lonmin is still looking to raise capital to survive, and with only a 75% uptake of its most recent rights issue, the confidence is not there. Cash reserves have been depleted while unemployment is still high. Mines have also increased mechanisation spend while R450m was lost in wages given the ‘no work, no pay’ policy. The pain felt by all parties on the back of a strike is clear to see, but given all parties are pulling in different directions, one has to ask what will change this year. Unions have worker interests at heart, while companies look after shareholders. Where’s the middle ground? – Stuart Lowman

Mineworkers gather at Wonderkop stadium outside the Lonmin mine in Rustenburg, northwest of Johannesburg January 27, 2014. Government-brokered talks between South Africa's Association of Mineworkers and Construction Union (AMCU) and the world's top three platinum producers began on Monday in a bid to end a strike that has hit half of global output of the precious metal. Hopes for an immediate resolution to the strike, which began on Thursday, remained dim given AMCU's uncompromising approach to negotiations and with the two sides poles apart over wages. REUTERS/Siphiwe Sibeko (SOUTH AFRICA - Tags: BUSINESS CONSTRUCTION ENERGY CIVIL UNREST POLITICS)
Mineworkers gather at Wonderkop stadium outside the Lonmin mine in Rustenburg, northwest of Johannesburg January 27, 2014.

By Gideon du Plessis* 

The Association of Mineworkers and Construction Union (Amcu) would be in the spotlight this year because of a possible gold strike at Sibanye Gold and make-or-break wage negotiations in the platinum sector later this year.

When, after the five-month platinum strike in 2014, Amcu President Joseph Mathunjwa was asked about the strike’s devastating impact on workplaces and local communities, he replied by quoting the Swahili proverb: “When two elephant bulls fight it is the grass that suffers.” It is interesting that Matunjwa’s direct trade union opponent, National Union of Mineworkers (NUM) General Secretary David Sipunzi, indicated in a recent interview that he would never want to be at the helm of a strike such as the NUM strike in 1987, led by the then General Secretary of NUM, Cyril Ramaphosa, or of the devastating Amcu strike of 2014.

Gideon du Plessis, General Secretary, Solidarity
Gideon du Plessis, General Secretary, Solidarity

I share Sipunzi’s view, but I also realise that Amcu has grown from 30 000 members in 2012 to more than 130 000 members in 2015 under Matunjwa. Amcu’s phenomenal membership growth can be attributed mainly to the defection of NUM members following Mathunjwa’s campaigning for a minimum wage of R12 500 for mineworkers and his putting up a fight for abnormal increases, such as the 20% increase that ended the five-month platinum strike. Mathunjwa, therefore, has a successful track record, but it came at a price – as I have found during a recent visit to Rustenburg, two years after the strike.

Deon Farmer, Chairperson, and Pieter Malan, Director of the Rustenburg Chamber of Business agree that the local economy suffered irreparable damage as a result of Amcu’s strike in 2014, and they also agree that mining’s downward spiral has accelerated dramatically as a result. The loss of R450 million in wages as a result of the no work – no pay principle that applied during the strike that was divested from the local economy is also lost forever to local businesses. According to Malan, two thirds of local businesses depend on mining and as a consequence of the strike the cash reserves of those businesses that had survived – as well as of individual households –- had been depleted. I also know for example that Lonmin’s cash reserves had been depleted during the strike and that capital projects which would have created 4 000 new jobs, had been cancelled.

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The Chamber of Business further contends that the employment rate dropped by 30%; banks are now charging home buyers a risk premium; the rental market collapsed due to downsizing of contractors’ services by mines; the revenue of local municipalities dropped sharply which impacted service delivery; ethnic tensions rose, etcetera. According to the owner of the SuperSpar in Rustenburg Stavros Dionysios Phieros, spending patterns have also changed drastically since the strike and purchases are now mostly for essential products. Credit card sales increased by 60% versus cash sales. Phieros also said: “The problem did not go away after the strike and the long term effect was rather damaging with a drop in turnover in excess of 23% for the retail industry”

Notwithstanding the damage done to the business sector, Malan mentioned that the turnover of businesses concerned with the mechanisation of mining activities has risen by approximately 30% due to the increased demand for alternative methods to increase production and reduce labour. However, Farmer was concerned about the rise in crime due to the rise in unemployment that followed the 2012 labour unrest and strikes. Farmer is of the opinion that many of the criminals are desperate miners who had been retrenched.

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Being retrenched and not being able to take care of one’s family is traumatic, but crime can never be justified and workers will have to consider the folly of negotiating or striking themselves out of jobs. Therefore, a platinum strike has to be averted this year. A senior Impala representative mentioned to me that although a variety of external factors contribute to the crisis in the sector yet another strike would make a permanent end to investment in much needed capital projects because of the real concern investors have about labour stability and a perception that employees are acting as if their employer’s survival is of no concern to them. He added that should there be another strike the remaining lifetime of the mines, ranging between 30 and 50 years, will drop to between 15 and 20 years as a consequence.

An informed source at Lonmin further emphasised that the current unfavourable market conditions, the consequences of the 2014 strike and concerns about the upcoming negotiations pose major refinancing challenges to Lonmin; that the company would not survive another strike; and that the company’s employees are experiencing a socio-economic crisis as the result of high debt levels arising from the previous strike.

The reality is that Amcu will now have to realise that despite their possible well-intentioned promises to poor miners the “grass that was damaged by the fighting elephants in 2014” may well never recover. A trade union’s goal is firstly to protect the jobs of its members but also to protect the work of other employees, and populist trade unions will have to realise that the proverb “half a loaf is better than no bread” is now in the workers’ best interest.

  • Gideon du Plessis, Solidarity General Secretary
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