Companies / 1 September 2013, 11:23am / LOYISO SIDIMBA
Johannesburg - Mining giant Gold Fields chief executive Nick Holland’s 40 percent pay hike is likely to have hardened attitudes of unionists representing mineworkers about to strike.
The downing of tools will further cripple the ailing gold mining sector and signal the intensification of the annual strike season.
Holland was paid more than R45.3 million up to December last year, up from about R33m in 2011. The hike was more than R12.6m – enough to pay 1 010 mineworkers the R12 500 a month demanded by the Association of Mineworkers and Construction Union (Amcu).
Their demand is about 120 percent more than the present wages in the sector for entry-level underground mineworkers.
The mining industry is key to the economy – it represents 60 percent of export revenues, contributes nearly 20 percent of corporate tax receipts and 6 percent to 9 percent directly to the Gross Domestic Product (GDP) and up to 18 percent indirectly.
Already, Harmony Gold has complained that strikes at its Kusasalethu mine near Carletonville alone cost the company R1.2 billion in the year ending in June. Also up to June, Kusasalethu mined 2 740kg of gold, 2 893kg (or 51 percent) less than in the previous financial year due to labour unrest, Harmony Gold revealed.
The world’s third-largest gold producer experienced wildcat strikes as protests spread from Lonmin’s Marikana operations.
The Department of Labour’s recently released report, Job Opportunities and Unemployment in the South African Labour Market 2012/13, shows the private sector is holding back on expanding capacity and employing more people.
Labour unrest is cited as one of the economic challenges for this stance, according to the report.
This week’s Mining Lekgotla heard mineworkers were exploited by unscrupulous micro-finance entities operating across mining towns.
Peter Schwartz, senior vice-president for global government relations and strategic planning at New York Stock Exchange-listed cloud computing company Salesforce. com, said a vicious debt cycle was among the reasons workers demanded higher pay.
Schwartz said Rustenburg, the centre of platinum mining, had more than 80 formal micro-credit outlets, banks, micro-financing companies and underground pay-day lenders. According to Schwartz, interest and fees on a short-term loan is more than 25 percent a month, or 300 percent when annualised.
He told the lekgotla mining companies must monitor the amount of wage garnishments to repay such debts and provide personal finance education, debt counselling and aid in repayment restructuring.
The latest Stats SA GDP figures show mining’s contribution to the economy has declined by 0.3 percent following constant wildcat strikes.
Finance Minister Pravin Gordhan has also revealed the decline cost the national fiscus R6bn in revenue loss.
Schwartz told the Mining Lekgotla the 2012 wildcat strikes cost up to R15bn in lost revenue, and took at least half a percentage point off the country’s economic growth.
Harmony will also be hit hard by Amcu’s warning that it will lead a strike to bring the economy to a standstill. The union’s president, Joseph Mathunjwa, made the threat two weeks ago at the event marking the killing of 34 mineworkers in Marikana last year.
Harmony Gold signed a recognition agreement with Amcu in July for its Masimong mine in Welkom. Amcu now represents a third of the total workforce in Masimong while at Kusasalethu the union has 74 percent of the employees.
A strike by gold mineworkers in seven companies – AngloGold Ashanti, Gold Fields, Rand Uranium, Harmony Gold, Evander Gold, Sibanye Gold and Village Main Reef – appears inevitable, with negotiations that started on July 11 failing to deliver an agreement and the Chamber of Mines failing to meet the National Union of Mineworkers’ demands by yesterday.
Last year, about 17.3 million working hours were lost due to strikes, with mining accounting for more than 16.5 million. More than 100 000 miners went on strike, mostly wildcat. The Department of Labour said in 2012 a total of 99 strikes was recorded. Out of 99 strikes, 45 were classified as unprotected or unprocedural.
Young Economists for Africa’s Ayabonga Cawe warned that due to the breakdown of trust between employers and workers, this year’s strike season could last longer.
Cawe said: “This could mean lower export earnings, weakening of the rand and further downgrading of our credit rating.”
He said the common feature was workers’ militancy after Marikana.
Other sectors are set to follow the strike by the SA Transport and Allied Workers’ Union (Satawu) at South African Airways’s technical division.
SAA technical workers want a double-digit pay hike. Satawu warned its strike would cause delays for major airlines operating in South Africa including British Airways, Qatar Airways, Quantas, Kenya Airways, Mango and Kulula.
Another strike likely to wreak havoc starts tomorrow. Cosatu’s biggest affiliate, the National Union of Metalworkers of SA (Numsa), will lead about 72 000 workers, which it says are “cheaply exploited”, as they embark on a strike.
This includes workers in petrol stations, automotive retailers, panel-beaters, car and spare parts, fitment workshops, truck body and trailer builders and dealerships.
Between September and October last year, a violent three-week strike by thousands of truck drivers led to petrol pumps, ATMs and supermarkets running dry.
Fuel shortages are highly possible if Numsa’s strike is not resolved quickly.
This year’s lengthiest strike has undoubtedly been by Walter Sisulu University (WSU) academic and non-academic staff. It started on July 23 and enters its 40th day today.
By Friday, there was no end in sight with Higher Education director-general Gwebs Qonde saying the institution was broke.
The Higher Education and Training Department’s alleged inaction has raised suspicion that the government wants to close down the institution.
WSU convocation and alumni task team member Zincedile Tiya warned the third semester might be declared null and void due to the protracted strike.
“Students are victims of this impasse. Our greatest concern is the students who are not being serviced in terms of teaching and learning,” said Tiya.
He said it had been a horrible six weeks of no classes, no teaching and learning.
“When two bulls fight, it’s only the grass that suffers,” Tiya said.
Meanwhile, mining companies have promised to implement new initiatives in a desperate bid to contain labour unrest.
These include talks with unions on employees signing a code of conduct and reintroducing the mine productivity bonus.