[miningmx.com] – DESPITE having resolved some strike action, South
Africa’s mining industry remains mired in dispute, uncertainly and even tragedy.
Two miners at Toronto- and Johannesburg-listed Forbes & Manhattan Coal Corporation
(Forbes Coal) were killed earlier this week (November 1) in strike-related action at its
mines near Dundee, KwaZulu-Natal province.
And while production at the mines, Magdalena and Aviemore, is only 256,000 tonnes
of coal per quarter, the lesson is that the undercurrent among labour remains restive,
at best, fatally violent at worst.
“This has all been a wildcat process with lots of intervening factors,’ said Stewart
Bailey, vice-president of investor relations at AngloGold Ashanti. “We are moving
ahead cautiously, one foot in front of another until there’s greater certainty.’
AngloGold Ashanti is one of the companies that was able to negotiate a return to work
for its striking workers, but that didn’t stop two “sit-ins’ after wage agreements at its
Mponeng and Tau Tona mines, operations west of Johannesburg. At Tau Tona, workers
damaged a mine building.
Earlier today, Xstrata said it had dismissed 400 workers at an illegal strike at its
Kroondal chrome mine. But perhaps the direst warning yet comes from the platinum
sector, where the strike action started in August and where the majority of strikes still
continue.
“This is completely the wrong time to be offering unsustainable wage increases that
the moment people are back at work you just have to (lay off) a whole lot of people,’
Anglo American Platinum (Amplats) CEO Chris Griffith told Talk Radio 702.
“There will be implications for jobs,’ he said, adding that Amplats could not “negotiate
in a climate of anarchy’.
As if further proof were needed, one need only look at Lonmin’s terse statement
earlier this week that it was likely to seek job cuts barely two months after agreeing
wage increases that see its labour bill increase 14%.
It’s also worth noting that there’s less than two months before the mining industry
partially closes for the Christmas and New Year period.
“We’re in a situation where there’s ramp up on the mines, but that takes time to do
especially given the safety element of it,’ an industry source said. “By the time we’re
at full production, they’ll be a break again’.
According to David Davis, a gold analyst for Standard Bank Group Securities, the
March quarter, which includes the holiday period in December, always sees a
significant drop-off in days worked.
“There are about 275 days for mining throughout the year. Of this only 22% is
recorded in the March quarter. The highest production quarter is normally the
September (current) quarter.’
Analysts are already trimming back production figures for the gold sector. Davis says
between 100,000 ounces (oz) to 120,000 oz have been lost from strike action so far.
Nick Holland, CEO of Gold Fields, says workers at its KDC West mine are back at work
and while the situation is under control, he thinks the strike tension of this year will
feed into challenging labour relations throughout 2013.
“It’s not a question of all’s well that ends well. We will have to come up with our own
strategies regarding wage negotiations. We can’t rely on the unions to do that for us,’
he said.
Employees also have to recognise that the compound effect of wage increases some
three to four percent above inflation is also unsustainable, he says. “We shouldn’t
necessarily think the strike action that’s coming to an end now represents the end of
the issues,’ he added.
For its part, the National Union of Mineworker (NUM) believes flaring of labour
problems may still be a feature even at mines where there is worker turnout. “It’s a
fragile situation in the sense that strikes in the region unsettle mines where there is
worker turnout,’ says NUM spokesperson Lesiba Seshoka.
He doesn’t think unstable labour relations is the new normal, however. He’s
particularly optimistic about the outcome at the Amplats in Rustenburg. “I can’t see
how that strike is sustainable and what I’m hearing is that workers – who want to
return to work – are becoming increasingly critical of all the dilly-dallying with their
“leaders’,’ he says.
