Labor Strife Threatens South Africa’s Gold Mines

National Union of Mine Workers President Senzeni Zokwana, shown here addressing members at a recent meeting.
The NUM has issued an ultimatum demanding a wage hike of at least 60% for workers. (Photo courtesy NUM)
The National Union of Mine Workers (NUM), which represents 64% of a workforce of about 140,000 at South Africa’s gold mines, on August 24 issued an ultimatum to mining companies to meet its demands for pay increases of up to 60% or face strike action on August 31.

Centralized bargaining that began July 11, with the Chamber of Mines representing the mining companies, made essentially no progress through late August, with the mining companies’ offer of an increase edging up from 4% to about 6.5% and the NUM standing pat at its demands for 60%.

As of Wednesday, August 28, when this article was being written, NUM was expected to give the gold producers a 48-hours’ strike notice on Friday, with work stoppages to begin from the night shifts on Sunday or the morning shifts on Monday.

Large gold mining companies that will be impacted by a work stoppage include AngloGold Ashanti, Gold Fields, Harmony and Sibanye Gold. The companies were reported to be gearing up for a strike that could last as long as three months.

The gold-industry bargaining process was complicated by the fact that three unions besides the NUM were involved, with each union presenting its own list of demands. The Association of Mineworkers and Construction Union (AMCU), which is competing with the NUM for members, and the smaller Solidarity and United Association of SA (UASA) unions were asking for wage increases ranging from 15% to 150%.

The Chamber of Mines reported that the average entry level basic wage in the gold industry is ZAR 5,000/month, following wage increases effective October 2012, and that with benefits, including housing allowances, the total increases to ZAR 10,261/month. (The South Africa Rand:US dollar exchange rate in late August was about ZAR10:USD1.)

South Africa’s independent Commission for Conciliation, Mediation and Arbitration had responsibility for overseeing the negotiating process. On August 22, the commission issued a “certificate of non-resolution” with respect to the NUM and the UASA, allowing them to embark on legal strike actions after giving the companies a 48-hours notice.

The imminent potential for strikes in South Africa’s gold industry was only part of a wave of industrial action that was unsettling the nation’s economy in late August. The automobile manufacturing industry was essentially shut down on Monday, August 19, when about 30,000 workers went on strike. As of August 28, walkouts were also in progress or threatened by workers in the construction and textile industries and at airports, car dealerships, and gas stations. Estimates of how many workers might participate in strikes ranged as high as 335,000.

Prolonged strikes would have a devastating impact on South Africa’s gold industry, where companies have been squeezed between recently lower prices and rising costs. From a wider perspective, the national trend toward increasing labor unrest has the potential for destabilizing South African politics and scaring off foreign investors.

Platinum Mines Have Troubles of Their Own:
August 16, 2013, marked the oneyear anniversary of the confrontation between police and striking mine workers and their supporters at Lonmin’s Marikana platinum mine near Rustenburg, South Africa, during which police shot and killed 34 people and wounded 78 others. Union rivalry between the NUM and the AMCU was cited as the primary cause of the violence.

The rivalry has remained a source of violence over the past year, including the murder of an NUM woman shop steward, who was shot and killed as she was walking to work at Marikana on August 12, 2013. An estimated 20 members of both unions have been killed since the violence at Marikana a year ago.

On August 14, Lonmin signed an agreement with AMCU, recognizing AMCU as the dominant union at Marikana. The agreement had a goal of achieving peace and stability at Marikana. Whether that will actually happen remains to be seen.

In other news, on August 19, Anglo Platinum announced plans for restructuring its operations, following consultations with key stakeholders and unions stretching back to February. The company had announced plans in January to reconfigure its Rustenburg operations, with the loss of up to 14,000 jobs. The following uproar led to the consultation process and the new restructuring plan.

Under the new plan, approximately 6,000 operational jobs will be lost, along with the jobs of 900 other corporate employees. The NUM said elements of the plan were unacceptable and if carried through in full could lead to strikes.

As featured in Womp 2013 Vol 09 -