Culling the crocodile
by George Annandale
2009-07-13 07:58
I am not sure whether I should be sad, bemused or angry. The hostage drama at the Crocodile River platinum mine near Brits has to stand out as another extreme act of sadomasochism by the "entitled proletariat" under the guise of the "poor oppressed worker".
To understand the issues and dynamics of the situation it helps to have a bit of a background of events leading up to the crisis. The existence of this mine in itself is a minor miracle, having changed hands five times since it came into existence in the mid 1980s. The mine has been profitable for very short periods and only when the platinum group metals were at extremely and unsustainably high levels.
Currently the mine is not profitable and is burning cash in the hope that the platinum price will pick up, the rand will weaken or hopefully both. Should this not materialise, the mine will probably close before the year-end. The current situation will, most likely, expedite the eminent mine closure and resultant job losses at this company built on hope and prayers.
During the chequered history of the company, few people made money. Those who made money can thank good timing, luck, greed and good marketing. Some who owned the mine during the years were able to sell their "asset of dubious value", to often poorly informed and over-optimistic investors, "high" on platinum price euphoria. The current owners represent a considerable number of ill-informed Canadians since the company is registered in Canada with its trading in Toronto and Johannesburg. This can be interpreted as a subtle warning to the few stupid investors out there who, despite the Fraser report, are still investing into South African mining projects.
In order to keep the mine going management, I believe took a number of actions to preserve cash and keep the mine going in the hope that the platinum price will recover. The objective of these actions is to recover losses and to make profit. As a result, people remain employed and suppliers are paid. Actions taken include the reduction of development, necessary to open ore reserves for longer-term sustainability, the removal of the mining contractor responsible for operations and taking over the work force thus removing waste from the value chain.
It is the ex-contractor workers who now hold people hostage demanding permanent employment on a mine making a loss but with the clear intent to keep them employed as long as humanly possible.
These "entitled" elements in our society are intent on biting the hand that feeds them. They are quite prepared to go and lie at home and breed once they have destroyed the business. Unfortunately, this action is the result of a strike culture that permeates South African society.
The irony
A culture perpetuated by unions in their power struggle against the market economy. The union of course, denies that their members are holding hostages. Anyone believing this assertion is incredibly naïve taking into account that the union involved is the National Union of Mineworkers, the same lot that is holding the country hostage with the 2010 soccer stadium gun against our heads.
It is ironic, were these poor hostage holding strikers stuck underground because of a power failure or other technical reason, the union and the DME would have been extremely critical of about management's disregard for miners' safety. It must be understood, dangerous situations in mine can only be created by management. The "experienced, intelligent and highly perceptive worker" will never expose himself to danger
With the Pamodzi case still fresh in our minds the astute thing is for Crocodile River Management to cut their losses, stop the bleeding and get the hell out of there. One just wonders how many companies must be closed down by irresponsible unions and their members before sanity will prevail.
There are few winners here. The investors, with few lucky exceptions, will lose their money, the employees will lose their jobs, the strikers and hostage takers deservedly so and suppliers will have to write off what is owed to them.
The BEE partners, who obtained their stake in the company at a discount, may not loose and probably already took their profits at the expense of workers and real investors. The Union will be walking away, smiling and flexing their collective muscles after another "well-deserved" victory for the left and a body blow for sanity.
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