R12?500: The mine wage that will define labour relations

2014-06-16 10:00

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Are mines overplaying their financial woes, or is the increase really unaffordable?


The demand for R12 500 became etched in the consciousness of the platinum miners. It was unlikely a settlement that moved away from this figure would be acceptable to the strikers. The Association of Mining and Construction Union (Amcu) had virtually no room for manoeuvre.

Research undertaken by the Alternative Information and Development Centre (AIDC) has indicated that, contrary to popular belief, wages for 50% of the workforce remained stagnant since 1994. As of 2012, half of the workforce earned R3?300 or less.

The radical demand for R12?500 threatened to revolutionise wage bargaining and turn the labour movement on its head. Negotiators from the three platinum producers – Anglo American Platinum, Impala Platinum and Lonmin – reported they hardly had to be involved in wage negotiations prior to this strike.

In spite of platinum strikes before 2012, matters were easily resolved once some steam had been let off. The National Union of Mineworkers (NUM) could easily relate to the axiom “don’t bite the hand that feeds you”.

The lowest-paid workers that make up the A, B and C band staged a revolt against this system during the wildcat strikes of 2012. Having made Amcu the majority union in the platinum sector, these same workers set out to win what could not be achieved in 2012 through the NUM.

The bosses of the three biggest platinum producers in the world had several months’ advance notice to stockpile their metals to weather the strike. But what they did not reckon on was the determination of their employees to win against all odds.

Amcu did amend its position from an immediate basic R12?500 to it being phased in over four years.

This would have required a R1 800 increase every year for four years in respect of the lowest-paid entry-level underground workers. The best offer the “cartel” came up with was R800. This was the basis of the infamous SMS offer made by the employers bypassing the union and breaking International Labour Organisation rules on collective bargaining.

Since then, whether it was in the mediation process of the labour court under Judge Rabkin-Naicker or through the interministerial team established by Mineral Resources Minister Ngoako Ramatlhodi, the employers dug in their heels by in effect repackaging the same offer, citing the poor state of the industry and problems of affordability.

Although completely unplanned for, the demand for a basic R12?500 salary by 2016 could be afforded by these three giants. As a recent report by the group Research on Money and Finance shows, the increase could be paid out of reduced dividends. The AIDC also indicated that companies sold their metals under the global market price (R15 billion lost over the 10 years from 2004 to 2013).

Perhaps of greater concern to the platinum bosses was the effect a victory of the striking Amcu workers would have. Every platinum mine might go on strike for R12?500. The demand could spread to every sector of mining.

This could precipitate the ultimate demise of the NUM, which, in the context of Amcu’s militancy, is a key stabiliser and partner of the Chamber of Mines.

This is a scenario too ghastly to contemplate – not just for the Chamber – but for the ANC and the tripartite alliance already sweating over a split in labour federation Cosatu.

Suddenly an economic strike is threatening to become a very hot political potato. The EFF is already in Parliament, waiting to profit from the outcome of this strike.

Ashley is a director at the Alternative Information and Development Centre

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