AMCU strike: Ramathlodi’s platinum team fizzles

When Ngoako Ramathlodi was recently appointed Mineral Resources Minister his first priority was to facilitate an end to the platinum strike that has hit families, communities and the overall economy hard. The strikes had been going for more than four months and Ramathlodi, true to his word, went into his new office the next day to start work. According to Sunday World, his predecessor Susan Shabangu found Ramathlodi there, in what was her office, and chastised him for ignoring a hand-over period. “She just doesn’t understand the gravity of the situation the country finds itself in,” an unnamed Mineral Resources official told the newspaper.

The two ministers’ approach to the platinum strike couldn’t be more different. Shabangu was reluctant to get involved, leaving that to Kgalema Motlanthe’s mining task team, which was stillborn when AMCU decided not to sign its framework agreement. On his third day on the job, Ramathlodi announced an inter-ministerial task team would speak to the strike’s stakeholders and try to broker a resolution. Negotiations between AMCU and Lonmin, Anglo American Platinum (Amplats), and Impala Platinum had broken down and the parties involved welcomed the intervention.

It appears, however, that the ANC’s national executive committee has pressured Ramathlodi to cease the intervention, which had already brought a fresh round of offers. In a statement on Saturday, the minister explained how it was unusual for government to involve itself in a labour dispute, but he had done so as a “last resort”.

“It is impossible to focus on other critical issues in the portfolio without addressing this strike first. South Africa needs a sustainable mining industry, and we place that at risk if we do not resolve this matter once and for all. Once we can move beyond this strike, we can free ourselves to focus on other critical issues ailing this industry, one of the most important of which is radical transformation,” he explained.

The task team has presented a proposal that both the companies and the union are looking at and meetings continued up until Friday. But, said Ramathlodi, Monday would be the last time he meets with all the parties. “I am making a humble appeal to all the parties involved to assist us to move this process forward. We cannot continue to meet indefinitely. At some point, we must find an implementable solution. We have seen how much the workers are suffering. They have gone approximately five months without pay, and have in effect been reduced to beggars. The situation is untenable. The companies are also under pressure. The economy is suffering – the latest GDP figures attest to that. We therefore have no option but to find a sustainable solution.”

The decision to terminate government discussions with stakeholders came while the ANC national executive committee met over the weekend. On Sunday, ANC Secretary General Gwede Mantashe explained the party’s view on the talks. During their meeting, the ANC questioned whether the labour dispute was about wages and conditions or politics. The party is concerned about “white foreign nationals” taking AMCU’s position, which may refer to Workers and Socialist Party organiser Liv Shange, whom Mantashe has spoken on before, or perhaps one of the foreign unionists who have voiced their support to AMCU at rallies. The ANC also took issue with Economic Freedom Fighter’s commissar Dali Mpofu being one of the union’s representatives in task team negotiations.

“These two factors led the lekgotla into cautioning the Ministry of Mineral Resources in handling the facilitation with care. There were questions about the role of the state in workplace disputes where there are clear rules guiding it,” said Mantashe. Intervening in the manner Ramathlodi has would mean he’d have to do the same in other sectoral disputes, which is untenable, Mantashe suggested.

Speaking for the platinum producers, Charmane Russell said on Sunday the companies were “grateful for and supportive of the interventions of the inter-ministerial task team”. Before the intervention, AMCU’s president Joseph Mathunjwa had pleaded for government to a stronger role in resolving the dispute. Allegations that it’s playing politics will no doubt anger the union, which is clear that conditions for black workers have not changed enough in the last 20 years, but says it doesn’t support any political party. There’s anger towards the ANC in AMCU’s stronghold, the platinum belt, where some people blame the party and its ties to the National Union of Mineworkers for the Marikana massacre. In the aftermath of those killings, opposition groups have mobilised in the area both to support communities and seek their votes, giving rise to ANC suspicion.

The platinum producers faced criticism this weekend with the release of a policy paper that found they hadn’t done enough to share profits during the boom years before the economic recession in 2008. In “Demanding the impossible? Platinum Mining Profits and Wage Demands in Context” Andrew Bowman and Gilad Isaacs, who are both working out of Wits University, look at whether the companies can afford to pay miners a “living wage” of R12,500 or whether the companies are in a period of financial difficulty as they claim.

In terms of the distributed benefits value added, the authors claim, “platinum shareholders have done extremely well over the last 14 years in comparison to labour. Combined with continued poor living conditions on the platinum belt, anger over low wages and large pay differentials between workers and management has acted as a catalyst for increased labour militancy.” Between 1999 and 2008 platinum prices rose from $350 to $2,100, with the companies’ operating profit margins doubling the JSE top 40 average and tripling the median rate. The return on investment was up to 10 times higher than the rate of 15% that the ANC considered “fair” in a policy document.

“This prioritisation of shareholder returns comes at the cost of both labour and long-term investment strategies and is a key facet of financialisation. Related to this is the tendency for a substantial portion of executive remuneration to take place through share options, or bonuses based on share performance, which means that executives have a direct stake in short-term shareholder value maximisation,” say the authors. After 2008, results aren’t as impressive for the platinum producers yet they are still strong.

But we have to look at the feasibility of current demands over the long-term, say Bowman and Isaacs. “While the companies can rightly argue that wages increased over this period, as a share of the value produced, gains for labour look much less impressive. It was during this boom time that labour was best positioned to fight for meaningful wage increases, but for the most part the NUM adopted a compliant approach to relations with management. In the more recent period the labour share of value added has grown considerably as revenue.” The authors argue that mining profits should be shared fairly and propose a resource rent tax. They believe the strike is likely to promote mechanisation and argue for government to intervene to avoid chaotic restructuring.

The platinum companies responded through Russell, who argued returns to stakeholders have to be considered beyond boom and bust periods. “Focusing only on a short boom or bust period by any of the stakeholders serves only to support individual agendas,” she said. Russell added that the affordability of wage demands should consider projected earnings. She said the companies recognise that both employee quality of life and labour productivity need to improve, but to achieve the former we should look at the latter. “Rather than how can we better split the profits we are not making, let’s turn the conversation around, and focus on how we can work together to generate the financial means to be able to better reward all our stakeholders, not only now, but in the future,” said Russell.

The companies have no issues, she said, with the paper’s conclusion that “[t]he public debate needs to take greater cognisance of all the facts, with a long-term view in mind, and deal with the broader issue of how best to manage our mineral resources to ensure all enjoy in the benefits they bring.” They likely disagree, however, on the method.

Today, Ramathlodi meets the stakeholders for the final time. As the issue drags on, the much-needed debate around the role of mining companies and their employees continues. But it seems we’re no closer to putting food on the table for mineworkers’ families, or getting the platinum sector going again. DM

Photo by Greg Nicolson.