Transformation in SA’s mining sector or an economic calamity?

The situation in the Rustenburg platinum belt could become a fundamental calamity that, if not dealt with properly, could slowly crack a major pillar of South Africa’s economic foundation.

The players involved in the wage negotiation process on South Africa’s platinum fields are worlds apart – and, it would seem, not just in terms of actual numbers.

Asked what the likely next step in the process will be in a strike that has cost the economy more than R11 billion already, the Commission for Conciliation Mediation and Arbitration (CCMA), told Mineweb that “talks were currently continuing and that the CCMA had full confidence in its mediation team”.

In contrast, however, Johan Theron, the group executive director of Impala Platinum, one of the mining companies heavily affected by the strike action, said the “talks remain deadlocked with no further engagements scheduled for now”.

Seeming to confirm this view, the Association for Mineworkers and Construction Union (Amcu) has made it clear that it will not engage unless its demands are met. The union is demanding an increase in the basic minimum wage to R12 500 per month in a bid to bring about structural change to the sector, while the companies have offered between 7% and 9% wage increases.

Amcu made a compromise two weeks ago, proposing a deal that will see its demands met over a four-year period at about 30% wage increases on a yearly basis. The CEOs of the various companies have made it clear that such an increase in unaffordable, stating in recent interviews with Moneyweb that they would have to pack up shop and vacate their mines if they conceded to these demands. Lawyers, consultants and other commentators have also weighed in on the matter, claiming that the demands are exorbitant.

On Tuesday, Amcu took to the streets of Johannesburg and marched to the buildings of Anglo American Platinum in Marshal Town to deliver a memorandum. A report from the South African Press Association quotes Joseph Mathunjwa, the president of Amcu, saying that “this was just the beginning” and that “six or eight weeks of strike action are nothing”, as the trade union’s aim is “to transform the mining sector”.

For Amcu, we are led to believe, this is not about gaining incremental ground in an ongoing war of attrition with the companies, rather it is meant to bring about a structural shift. And the chasm between the two parties is a good reflection of the state of inequality that still grips SA’s socio-economic standing. The meaning of life in the South African socio-economic context varies vastly from one sphere of society to the next.

Through some of our conversations with union leaders, the main gripe is that, out of the “more than 150 years that the mining companies have had in SA, they have not done much to take care of the interests of their workers. It was only when a black government came to power that they started engaging in various social rejuvenation projects”.

Fast forward to 2014, and there are still workers living in shanty towns, with no water, proper sewage or electricity. It took a massacre of 34 miners in 2012 to highlight the plight of these people and the failures of the government and mining companies.

The real question now is: if Amcu’s goal is a serious one: do the companies, workers and government leaders have the willingness to bring about such a shift? There needs to be a recognition, not only that many of the old mines are just not viable in such a scenario, but that such a structural shift does not come without significant upheaval.

But, thinking of this strike as just another attempt to gain a few more rands every month, would very likely be a mistake. The situation in the Rustenburg platinum belt stands to become a fundamental calamity that could, if not dealt with properly, slowly crack a major pillar of South Africa’s economic foundation.