Royal Bafokeng faces miners' strike as Lonmin fallout spreads
On Wednesday, miners have laid down their tools at the Royal Bafokeng Platinum company mine near Rustenburg. Like the disgruntled employees of Lonmin, they too want R12,500 pay. Slowly, and seemingly unstoppably, the contagion is spreading across Northwest South Africa, core of the world’s platinum mining industry. By SIPHO HLONGWANE.
The price of bread has historically been a bellwether for unrest and social upheaval in Western countries. As a staple food, if it suddenly became too expensive the peasants would rise up in anger against the upper classes. The most famous such revolution was the French Revolution in 1789, famously sparked when bread prices rose rapidly thanks to a succession of poor harvests. Between 1710 and 1713, the city of Boston in what would become the United States of America suffered three separate bread riots, as the city’s poor rose up in response to rising prices.
In the platinum mining belt in South Africa, the R12,500 figure has become a rallying point for disgruntled mine workers. The demand for net pay to rise from about a quarter of that started off at the Impala Platinum mine near Rustenburg and quickly spread to the Lonmin shaft at Marikana. After a series of escalating clashes between striking miners, and later the police, that particular strike became the centre of national attention.
Meanwhile, Royal Bafokeng Platinum (RBPlat) announced Wednesday that operations at one of its shafts at the Bafokeng-Rasimone Mine Joint Venture had been interrupted due to unprotected industrial action. Another wildcat strike had hit the platinum industry.
The striking workers, numbering at about 500 according to RBPlat, and some were rock-drill operators demanding that the company pay them R12,500 a month instead of R4,000. News reports said the strike was peaceful—unlike the one 30 kilometres southeast at Marikana—but the police were there in large numbers in any case.
The complaints of people interviewed at RBPlat’s mine were similar to those of those interviewed by Daily Maverick at Marikana.
“I have two kids to take care of, I spend R850 for school transport, spend R700 for my travelling and R800 for rental. After all this I am left with nothing,” said Lebogang Mosito, who claimed to earn R4,000.
Meanwhile, several memorial services for the 34 dead miners were planned for Thursday, to be held near the mine and in Rustenburg. The government had also finally reached out through cabinet ministers and President Jacob Zuma to the striking miners, but the mood still remained defiant.
The strike started after the National Union of Mineworkers (NUM) announced to the workers that RBPlat was seeking to go ahead with retrenchments. Most mining companies in the region, including Eastern Platinum, Aquarius Platinum and Anglo American Platinum have either retrenched workers or want to do so in the face of declining global demand for platinum. South Africa accounts for 75% of the world’s platinum production and 80% of its reserves.
RBPlat’s headline earnings declined by 59% with revenue down by 13.6% in the first half of the year. The company warned it would have to scale back on capital expenditure projects. At the end of July the company’s market capitalisation was R7.84-billion. When it listed in November 2010, it was worth R11.3-billion.
Speaking to Summit TV, RBPlat CEO Steve Phiri said violence could strike its operations. It was simply impossible to tell who would be next.
“These things are unpredictable. We saw it happening to our neighbour Impala and we are not immune, so we are always alert. We should not be misunderstood as saying we are against collective bargaining. Our employees are free to join any trade union of their choice,” Phiri said.
“Actually we encourage that freedom of association where it’s the decision of the employees whether they join or don’t join and how they bargain collectively for their rights,” he said.
Phiri said the company was trying to restructure to avoid job losses as much as possible, but those that would be fired would go in a staggered fashion to minimise the pain as much as possible.
Some miners have taken matters into their own hands at RBPlats, where the demand for all workers to be kept (while receiving a substantial pay-hike) is already being made.
Early on in the year, several platinum producers announced they would have to cut jobs because of market pressures, and Minerals Minister Susan Shabangu called several meetings with unions and mine bosses. A report was commissioned and arrived on her desk just before the ANC policy conference. In the meantime, Anglo Platinum announced it had sacked 725 workers in late July.
Shabangu still hasn’t announced what policy decisions she might make to amend the situation when the shootings happened at the Wonderkop squatter camp.
Just how this meeting of unstoppable movement and immovable object will happen is a puzzle that grows deeper with each passing day.
While platinum prices have been in decline as demand has slowed, the Lonmin production stoppage has provided some relief for the market, pushing prices up slightly. Still, an analyst quoted by Reuters said this wouldn’t be enough to save the industry’s over-supply woes.
“This still would not clear out the 210,000 ounces expected surplus we estimate for the year,” UBS analyst Edel Tully said. “But platinum is also pricing in the increasing likelihood of contagion, with market focus now shifting to (the world's biggest miner) Anglo American Platinum, the only major producer that has not yet been affected by union rivalry issues this year.”
Should Anglo Platinum experience a severe strike and tumbling production in the coming months, the platinum price would equalise drastically. What widespread social unrest would do to the industry in the mid-term isn’t pretty. The only feasible way to keep production going would be to turn the region into a mini-police state, but the atmosphere at Wonderkop suggests that reprisals wouldn’t encourage miners to return to work in their numbers.
Other mining companies should be able to stop any wildcat strike from getting as extremely violent as it did at Lonmin, but after that they would be stuck in the same supply/demand problem. Acquiescing to the demand for higher wages without any relief in sight as far as product demand is concerned would be financial suicide.
Belligerently sacking workers and closing some plants to equalise the wage bill would fetch even more unrest, as well as the disapproval of the government. Something will eventually give, and you can bet that every mine boss is begging for some miracle that will make the world suddenly want more than 250,000 ounces of platinum in a big hurry. DM
Photo: Underground at E & F shaft at Impala Platunum mine, near Rustenburg, April 2008. The rock drillers at Implats and at neighbouring Lonmin are mostly Pondo or Xhosa, unusual in a sub sect of the industry dominated by men from Lesotho. The Bafokeng nation - said to be the richest tribe on earth - gets most of its royalties from platiunum, and they have diversified into other investments under the guidance of their king. Photo Greg Marinovich.