SA mining deal could set precedent

By Drum Digital
20 September 2012

South African miners on Wednesday welcomed a deal to end a weeks-long illegal strike that cost the lives of 45 people, but some observers worried the agreement would set a precedent.

The National Union of Mineworkers, the country's largest trade union, said the wildcat strike at Lonmin's vast facility northwest of Johannesburg and the resulting deal could prompt other miners to act without going through union-approved channels.

"The normal bargaining processes have been compromised," NUM general secretary Frans Baleni told local radio.

"It does suggest that unprotected action, an element of anarchy, can be easily rewarded, people can do certain wrong things with impunity and that means that it can roll over to other operations."

Under the deal signed late Tuesday at Lonmin's mine in Marikana, miners will return to work at 7:00 am (0500 GMT) Thursday in return for pay rises of between 11-22 percent, plus bonuses. The increases fell a little short of demands for a monthly salary of 12,500 rands (1,160 euros, $1,520).

The miners first went on strike on August 10, sparking clashes between rival unions that left 10 people dead. On August 16, police gunned down 34 protesters in a shocking incident with echoes of apartheid brutality. Dozens more were injured.

Other gold and platinum miners in South Africa's key mining sector have already taken up wage demands as unrest forced the closure of several other mines.

The Marikana strike turned mines into a political battlefield, with President Jacob Zuma's rivals mounting fresh attacks ahead of a key leadership contest in the ruling African National Congress and the firebrand former Youth League head Julius Malema siding with the miners.

Lonmin, a Britain-based platinum mining giant, defended the deal that brought an end -- for now at least -- to the labour dispute.

"This is a groundbreaking agreement, so we do not have any concern in setting a precedent," Lonmin spokesman Abey Kgotle said. "We think this was an extraordinary situation and we have... taken extraordinary measures."

But Peter Attard Montalto, an analyst with London-based Nomura International, said Lonmin's deal risked sparking a "contagion" of unrest.

"Lonmin caving in and offering both to tear up the existing wage settlement for this year and then agreeing such a substantial increase for workers surely risks creating moral hazard and contagion," he said.

Mining in South Africa directly employs around 500,000 people and, if related activities are factored in, accounts for nearly one-fifth of gross domestic product. Many miners toil under terrible conditions and struggle with low wages.

Unlike in South Africa's gold mines, the platinum sector has no industry-wide agreement.

Also Wednesday, police fired rubber bullets at a crowd gathered near a platinum mine operated by Anglo American Platinum, known as Amplats.

Police last week announced a security clampdown and are now acting swiftly to stamp out illegal gatherings.

"We have had strikes that have been increasingly violent in the last few years, and government didn't move," said Peter Major, a mining expert with Cadiz Corporate Solutions.

"This time, the government has been involved, this is the new precedent. I am really curious to see the next strike."

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