Carli Cooke
A clash between unions is threatening to spread across South Africa’s platinum mining belt and disrupt production in a region accounting for three-quarters of world supplies of the precious metal.
Already this year fighting between the 30-year-old National Union of Mineworkers (NUM) and the up-and-coming Association of Mineworkers and Construction Union (Amcu) has led to four deaths and a strike that shut the biggest platinum mine, the Rustenburg operation of Impala Platinum (Implats), for six weeks.
Now Amcu says it may call a fresh strike at the mine to gain the right to deal with the company and it is recruiting at the mines of Anglo American Platinum, the largest platinum producer, having also secured a foothold at Lonmin’s Karee operation.
For the unions about R100 million in annual fees is at stake. For the companies, production of about 5.5 million ounces of platinum a year, worth $8.2 billion (R68.8bn) at current prices, is threatened.
“The impact on the mining industry could be severe,” Anne Fruhauf, an analyst at New York-based risk research company Eurasia Group, said last week. “Employers believe that union rivalry could benefit their negotiating position in the long run, but such long-term gains may come at a high price in the short term, by causing major mine disruption and production losses.”
The price of platinum, used in jewellery and in equipment to cut pollution from cars, has fallen 17 percent in the past year to $1 485 an ounce at yesterday afternoon’s London fix.
In February, Angloplat announced a review of its operations because of unsatisfactory profits.
Last month Lonmin posted a first-half loss and Implats said third-quarter production fell 46 percent because of the strike.
Aquarius Platinum idled a mine shaft at Marikana earlier this week and in May Eastern Platinum halted the development of a mine.
The shares of the three major platinum producers, all of which are based in Johannesburg, are the worst performers over the past year on an index of the 40 biggest companies traded on the JSE, with Angloplat falling 21 percent, Implats 23 percent and Lonmin 43 percent.
“We’re worried about the state the industry finds itself in,” Justin Froneman, an analyst at SBG Securities, said. “The industry just isn’t making a return. Local-currency prices for platinum group metals are almost unchanged over the last two years, while mining inflation has been about 15 percent a year for the past three.”
The NUM, which was founded in 1982 and became the country’s largest labour union as it fought against apartheid with the ANC, says Amcu is using force to take its members at Implats’ main mine 145km northwest of Johannesburg.
In addition to the deaths, the strike resulted in at least 50 people being injured and cost more than 120 000 ounces of production.
Protesters set fire to cars, barricaded roads and miners going to work were attacked with guns, axes, traditional fighting sticks and stones.
The unrest began when rock drill operators went on strike illegally after other workers at the mine were given a pay rise.
The striking workers were later fired by Implats and compelled to reapply for their jobs. That unrest degenerated into inter-union clashes as striking workers tried to prevent colleagues from working.
Rock drill operators including Emmanuel Ntetha said in February that they had lost faith in NUM because it did not ensure that all workers got the same pay rise.
NUM president Senzeni Zokwana said at the time that the local branch of the union had not communicated adequately with its members at the mine.
“Our members are forced to resign from NUM through assault or killing,” Eddie Majadibodu, the chief negotiator for NUM at Implats, said by phone on June 4.
Amcu, which says it does not advocate violence, said in a legal notice to Implats that it had recruited half of Rustenburg’s 30 000 employees and had the right to be the dominant union in terms of the labour law. The company said on May 29 that NUM had lost at least 10 813 members.
“NUM has failed to represent Implats employees,” Amcu president Joseph Mathunjwa said at a press conference on June 6. NUM negotiated a poor wage deal for workers, sparking the strike in January, he said. “Now employees have found a new home in Amcu.”
Amcu was “strongly recruiting” at Angloplat and had gained more than 5 000 members at Lonmin, the third-largest producer, Mathunjwa said.
Lonmin said in a stock exchange statement on May 14: “The rivalry for membership between the unions could be a feature for the foreseeable future with a corresponding increase in the risk of escalation of costs and disruptions to production.”
Workers pay the unions 1 percent of their basic salary, excluding overtime pay and benefits such as medical insurance and housing allowances, for membership.
At about R80 a month per employee, the Rustenburg mine alone generated about R1.6 million a month in membership fees, Johan Theron, Implats’ group executive for personnel, said on June 4. About two-thirds of employees at the mine belonged to unions, he said.
Yesterday Implats inched up 0.92 percent to close at R143, Angloplat rose 0.23 percent to R511.90 and Lonmin declined 1.7 percent to R93.26.