News / Economy

S. Africa Strike Hits More than Half Global Platinum Production

Mine workers protest outside the Lonmin mine in Rustenburg, northwest of Johannesburg, Jan. 23, 2014.
Mine workers protest outside the Lonmin mine in Rustenburg, northwest of Johannesburg, Jan. 23, 2014.
Anita Powell
— South Africa’s most powerful platinum mining union has launched an indefinite strike, demanding a significant salary hike for entry-level miners.  The strike affects more than half the global platinum production.  The action is another blow to a sector still struggling to recover from a 2012 wildcat strike that led to a police confrontation that left 34 miners dead.
 
About 70,000 workers at three of South Africa’s largest platinum mines failed to clock in Thursday after negotiations between their union and the mines failed to reach an agreement.
 
The Association of Mineworkers and Construction Union is demanding a minimum wage of about $1,200 (R12,500) for platinum miners at Anglo American Platinum, Impala Platinum, and Lonmin, which account for the bulk of the world’s platinum production.
 
AMCU treasurer Jimmy Gama did not answer repeated calls seeking comment.
 
Lonmin spokeswoman Sue Vey said just 15 percent of the company’s employees showed up for work Thursday.  The strike, she said, is losing the company 3,100 ounces of platinum per day, worth nearly $4.5 million.

Impala Platinum, or Implats, also said this week the union's demands would more than double their wage bill.  Implats noted that AMCU’s rival union, the National Union of Mineworkers, had forged a two-year agreement for much more modest raises at another of its mines.
 
Lonmin spokeswoman Vey said AMCU’s demands are unsustainable.

“The demands made by AMCU, you know, will affect the sustainability of the business.  And we have had months of negotiations and management has made a number of offers to AMCU, but they have all been rejected... but we believe the offers have been fair and that they are sustainable for the business,” said Sue Vey.
 
Lonmin has a grave history with the Association of Mineworkers and Construction Union.  In 2012, the AMCU, then a minority union to the larger National Union of Mineworkers, was blamed for leading an illegal strike at Lonmin, demanding the same salary as they are today.
 
During a clash in the nearly two month work stoppage, South African police shot dead 34 of the strikers.  
 
Unions at odds

More than a year ago, an official with the powerful Congress of South African Trade Unions predicted the AMCU, an upstart union, would fizzle out.  It did not, instead it grew, gobbling up members from NUM.
 
But police say by the one-year anniversary of the shooting they had documented more than a dozen tit-for-tat killings of representatives of the two main unions.  Residents near the mines said they felt under constant threat from union-backed thugs.  

Police, who set up a special unit for mine crimes in the wake of the 2012 shooting, said they deployed forces to keep peace Thursday around a strikers' rally at a stadium near the Lonmin mine.

But NUM General-Secretary Frans Baleni says his members are being pulled into AMCU’s strike against their will, and called for police to prevent violence.

“Well, it has been brought to our attention that around Impala, in particular, there were three people who have been assaulted who were on their way to work, and in Lonmin yesterday and the day before threats were made openly that anybody who might attempt to go to work will be permanently eliminated from planet Earth.  So clearly they were using intimidation with the intention of ensuring that non-strikers are not participating,” said Baleni.

Top South African officials have expressed concern about the platinum strike and a possible gold mining strike.

Earlier this week, Finance Minister Pravin Gordhan told South Africa’s state broadcaster that 18 months of struggles in the platinum sector have left the nation unable to afford the toll this strike may take.  

But this strike may also have a political cost for President Jacob Zuma and his African National Congress party, who face national elections this year.

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