South Africa and the Marikana effect

After a strike left 34 dead, one mining firm increased wages by 22 per cent. Could the deal be contagious?

KIM LUDBROOK/Corbis

First, the miners went on strike. Work stoppages swept through South Africa’s platinum, gold, diamond and chrome mines. Now, truckers are off the job, and a municipal workers’ union is poised to walk off, too. The frequency of strikes has spiked since Aug. 16, when police opened fire on workers who had gathered outside a platinum mine in Marikana, killing 34.

In the wake of the incident, Lonmin, a global platinum-mining firm, settled the conflict with a 22 per cent pay raise. Strikes have spread beyond mining. Toyota recently reported a four-day shutdown because of labour disruptions at its factory; and Shell said last week it could not honour fuel-delivery contracts around Johannesburg because of a truckers’ strike. At a city supermarket in the city, the price of apples has jumped 27 per cent since the truck drivers’ strike began.

Last week, Anglo American Platinum Ltd., the world’s largest producer of platinum, fired 12,000 striking workers. The company claims to have lost US$80 million in revenue since striking started. The miners were demanding a monthly salary of $1,800—more than double what some now earn.

The country’s economy has taken a walloping as a result. Moody’s Investors Service cut the nation’s bond rating last month by one notch—from A3 to Baa1—the first downgrade since apartheid. The credit agency cited the government’s inability to deal with economic and political challenges and the challenges posed by “relatively high labour costs despite high unemployment.” The rand, the country’s currency, fell to a 3½-year low against the U.S. greenback. It now takes nearly nine rand to buy one dollar. The strikes have highlighted a growing feeling of inequality in South Africa; many believe the African National Congress government has done much for an elite few and very little for average South Africans.

President Jacob Zuma’s response to the crisis has been criticized as tepid. “We should not seek to portray ourselves as a nation that is perpetually fighting,” Zuma said last week. “We must create a climate of constructive social dialogue, which South Africans are known for.”

Perhaps he is distracted. Zuma, who is running for re-election to the ANC presidency in December, is facing an investigation after spending millions of taxpayers’ dollars renovating his private residence in KwaZulu Natal, complete with a helipad and two Astroturf soccer pitches.

Strikers, meanwhile, have turned to shows of violence, an apparent negotiating tactic, to up their pay. Union leaders publicly condemn it, but non-striking workers, known as amagundwane—a Zulu word for rats—have been targeted. Despite an order issued by a Johannesburg court to stop attacks associated with the transport strike, trucks continued to be torched and stoned last week. In one incident, three people, including a child, were injured. In Cape Town last week, Gary Stewart, a trucker, died after being removed from life support; he’d been hit by a rock thrown by strikers.

How are the mining companies responding? Platinum executives are holding 16 bargaining sessions throughout October with the goal of creating a centralized collective bargaining process to avoid further strikes. “The opportunity should be taken to vent or to show displeasure or anger or resentment with the conduct of other parties around the table,” said talks facilitator Charles Nupen—even “if we get a bit of sweat on the walls.”

Whether there is room for negotiation is questionable. Platinum strike leader Evans Ramokga says the firm will hire new employees “over our dead bodies.” As Tanya Venter, a professional mediator who is working with the striking workers says, “It has shocked our country to the core.”




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South Africa and the Marikana effect

  1. Why is that miners in Australia, digging up the same minerals, working in a similar environment earn more in a day what these South African miners earn in a week why the CEOs of Australian mines are “only” multimillionaires rather than the billionaire CEOs of these South African mines?

    • look at the statistics though. miners in Australia are far more productive and there is much greater automation per tonnage than their south african counterparts. south african mines are also the deepest and are far more hazardous than most other mining operations in the world. so you are not comparing apples with apples. this is not a value judgement or condones lower salary scales – just statistics. It takes less miners to extract a ton of gold/platinum in australia than in an average south african mine among other reasons. you also need to look at the grade of ore mined up to achieve tonnage – very expensive labor per ton to achieve comparative grades in south africa. the south african mining industry is more labour intensive also to create more jobs – this also leads to lesser pay factors to achieve ROI. also, south africa is dealing with huge legacy issues in terms of ownership and equitable skills development challenges historically.

  2. It’s time to end the economic aparthied and let all South Africans enjoy the wealth of their land.

    • A very misguided view, but one that the alliance of the South African Communist Party, African National Congress and Cosatu (umbrella organisation of mostly Marxist workers unions) strife for. South Africa is governed by a coalition of the above organisations.

      The South African government has strong Marxist views as is evident in their policy document: “The National Democratic Revolution.”

      To learn more:
      http://why-we-are-white-refugees.blogspot.ca/2010/08/national-democratic-revolution-is.html

      • You know as well as I do that the ANC and pundits in SA throws around the word capitalist like the US politicians and pundits use the word socialist. It means nothing and it is used to appease the masses. At the end of the day, when you look at the governmental policies, the regulations in place and the politicians’ actions, the market place in SA clearly operates within a capitalist systeme and are communist/marxist in name only.

        Furthermore, this idea that the white man in SA is in danger and needs to be rescued as is indicated by your link is a fallacy. Look at the stats but most importantly, wherever you are or were in SA, take a walk outside and leave your gated community. Even better, travel to the remote regions of the Eastern cape, go to Mthatha, go to isolated villages in the mountains where the passage rate for Matrix is less than 15%, unemployment is 90% and tell me who’s future looks bleaker…

  3. Supply and demand. For every Australian Mine job applicant, South Africa has a thousend. If an Australian mine captain had a line outside his door wages would drop. South Africa needs high volume employment at competitive wage levels to soak up extra supply. As long as there are more applicants than positions wages will remain low. As soon as a country nears full employment wages rise. Its that simple.
    To do this you need to free up the labour market. This however goes against socialist ideolegy and this is the core of the problem in South Africa.

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