As this edition of E&MJ was going to press, Anglo American Platinum (Amplats), the largest platinum miner, had dismissed 12,000 striking miners. Wildcat strikes were spreading beyond the bushveld to the rand. Miners had walked off the job at gold mines and iron ore mines. It’s now estimated that more than 100,000 miners in South Africa were on strike (See, News-Africa, p. 18), seeking wage-related concessions.
The mining industry holds South Africa in high regard as one of the greatest mining nations. The region has vast resources and is steeped in mining history. Those resources lie at depth and can be challenging to mine, which often proves costly. Underground mining methods are labor intensive and the mines’ access to a large pool of labor has helped them remain profitable. Still of the $676 billion invested in mining last year, South Africa received only $25 billion (4%).
South Africa is also Africa’s wealthiest country and the world views South Africa as the gateway to the sub-Saharan continent. Business has flourished in urban areas, such as Johannesburg, Pretoria and Cape Town, which are worlds away from the rural settings where the mines are located. Even though mining only represents 10% of the GDP, people are worried that the strikes will spread to other sectors. The most violent protests South Africa has experienced since the end of the apartheid era has focused attention on wealth inequities.
South Africa’s mining industry employs about 500,000 people and the nation currently suffers from 25% unemployment. Gold Fields currently has 24,000 miners striking illegally. “This unrest comes about because of the simmering anger about growing inequality in South Africa and workers feel they are not benefiting from the wealth they are generating,” said Mamphela Ramphele, the chairwoman of Gold Fields. “They have lost faith in their representatives. They believe employers are not doing a fair deal with them and also feel the government doesn’t care about their welfare.”
The decision by Amplats and others to fire the striking miners establishes a firm position in labor negotiations. Technically, the miners have lost all rights to long-term benefits such as severance pay. The Amplats CEO says they are committed to participating in centralized engagement structures driven by the South African Chamber of Mines. They are also working with local authorities to establish law and order. The Chamber of Mines, which also represents the major gold miners, is negotiating with labor representatives to establish a framework for negoiations.
The unions, however, have fractured. Traditionally, the miners were represented by the National Union of Mineworkers (NUM). Several NUM branch leaders have been killed since the uprising began. Today, the Chamber of Miners is negotiating with three groups, NUM, UASA and Solidarity. The Congress of South African Trade Unions has also entered the discussions, and is calling for an inquiry into the working and living conditions in the mining industry. The African National Congress has also met with the Chamber of Mines to discuss developments.
This is a complex situation. Massive across-the-board increases in pay for such a labor-intensive sector could render the mines uncompetitive. Yet, it’s easy to understand the miners’ desire to improve their situation. Black Economic Empowerment was supposed to redistribute the wealth evenly. Unfortunately South Africa’s economic inequalities have worsened and the current situation is no longer sustainable.