MAC: Mines and Communities

South Africa: little sign of end to mine labour strife

Published by MAC on 2013-07-22
Source:, Reuters

South Africa's gold mining companies have offered a derisory 4% wage increase to their workers - one coming nowhere close to meeting trade unionists' demands.

Meanwhile, threatened with further strikes by the "dissident" Association of Mineworkers and Construction Union (AMCU), Impala Platinum has recognised the AMCU as its majority union, and Lonmin is considering following its lead.

Despite these moves, the AMCU has roundly rejected a government-led "agreement", designed to bring stability to the mining industry, declaring that:

"Even if AMCU signs on later, the pact does little to resolve the turf war between rival unions or moderate wage demands, and labor unrest remains likely during upcoming negotiations over recognition and wages."

Almost after a year after the infamous Marikana massacre, it remains highy doubtful whether any recognisable  state of "peace" will soon return to South Africa's gold or platinum sector.

Yawning gap between wage demands and offers in South Africa

Ana Komnenic

15 July 2013

South Africa's major gold mining companies offered 4% wage increases to the country's mine workers during negotiations in Johannesburg on Monday - a fraction of unions' demands of up to 60% pay hikes.

The opening offer is based on weak gold prices, increasing production costs and falling productivity, company representatives stated, adding that labour costs make up more than 50% of their total expenses.

The offer also includes a 4% increase in living-out or housing allowance.

The raise would push entry level underground and entry level surface salaries to approximately $900 (8,900 Rand) and $800 (8,000 Rand) per month respectively. These figures include basic wages, living-out allowances, medical benefits and retirement contributions.

The lowest entry-level wage currently stands at about $500 (5,000 Rand), according to data compiled by the Chamber of Mines - an organization of the country's mining employers.

The proposal does not come close to meeting union demands which include pay increases of more than double. In May, South Africa's National Union of Mineworkers demanded wage hikes of up to 60%.

Worker representatives also argue that the raise is less than the current inflation rate of 5.6%, according to The Wall Street Journal.

Mine workers are "pleading poverty," a union representative told the Journal. "This is the opening offer. We know there is room for movement."

Mine strikes have plagued the country's ore industry for years, including labour unrests last year that killed 34 people. Meanwhile South Africa's major unions are fighting a battle amongst themselves, with each group vying for increased membership.

Fearing a repeat of last year's violence, the country's labour minister was considering deploying peacekeeping troops during labour unrests in June.

Negotiations between gold miners and unions will resume on July 24.

AMCU cements position as dominant mine union

Sherilee Lakmidas


12 July 2013

JOHANNESBURG - Impala Platinum has recognised the Association of Mineworkers and Construction Union (AMCU) as its majority union, cementing the upstart labour group's position as a serious player in the South African mining industry.

In the last 18 months, AMCU has won over thousands of members from the National Union of Mineworkers (NUM), a key ally of the ruling African National Congress, but has struggled to secure full union rights at most platinum and gold producers.

That is now changing.

"Implats confirms that it signed a majority recognition agreement with AMCU on July 10," spokeswoman Alice Lourens said. AMCU represents 55 percent of Impala's 28,000-strong workforce, she added.

The agreement with the world's second largest platinum producer coincides with a majority recognition deal struck this week with Sibanye Gold at its Driefontein mine.

The union also made its first appearance this week at the two-yearly gold sector wage talks - negotiations billed as the toughest since the end of apartheid, with demands for a doubling of basic pay set against collapsing bullion prices and shrinking profit margins.

AMCU's emergence as the dominant player in the platinum sector sparked a vicious union turf war last year in which producers lost billions of dollars of output and more than 50 people were killed.

But AMCU has made fewer in-roads in gold and according to the Chamber of Mines claims just 17 percent of gold mining workforce compared with more than 60 percent for the NUM.

"We recognise all unions and the agreement reached with AMCU is consistent with the prior agreement we held with the NUM, the previous majority union," Sibanye spokesman James Wellsted said.

Driefontein accounted for just over 40 percent of Sibanye's production in the three months to end March.

Sibanye shares were down 5.5 percent at 8.03 rand, reversing two days of strong gains. Implats shares were off 2.3 percent. (Reporting by Sherilee Lakmidas; Editing by Ed Cropley)

Lonmin Moves Closer To Recognising South Africa's AMCU


15 July 2013

JOHANNESBURG - Lonmin said on Monday it would give the National Union of Mineworkers (NUM) the boot this week, allowing it recognise the rival Association of Mineworkers and Construction Union (AMCU) as the main union at its South African operations.

NUM had gone to South Africa's Labour Court to try to protect its dominant position at the world's third-largest platinum producer but the case was thrown out on Monday, the day before its majority membership deal expired.

"NUM will formally be de-recognised as the majority union on Tuesday, which opens the way for Lonmin to cement a deal with AMCU," Lonmin spokeswoman Sue Vey said. "We are hoping that this will now lead to peace and stability at our mines."

In the last 18 months, AMCU has won over thousands of members from the NUM, a key ally of the ruling African National Congress, which faces an election in less than a year.

More than 50 people have died in the union turf war, which has cost platinum and gold producers billions in lost revenue and led to credit downgrades for Africa's largest economy.

AMCU is fast becoming a serious player in the mining industry and was recognised as the majority union at Impala Platinum and at Sibanye Gold's Driefontein mine last week.

The union also made its first appearance at the two-yearly gold industry wage talks last week, despite its slower membership growth in the bullion sector.

AMCU's emergence as a majority union has upped the stakes in the wage talks, with demands for a doubling of basic pay set against collapsing bullion prices and shrinking profit margins.

South Africa mining pact unlikely to quell unrest

Andre Janse van Vuuren


4 July 2013

A government-led agreement designed to bring stability to South Africa's mining industry will do little to deter strikes or temper wage negotiations, according to analysts.

The Association of Mineworkers and Construction Union, the biggest labor group at the world's three largest platinum mines, yesterday refused to sign the deal.

"Even if AMCU signs on later, the pact does little to resolve the turf war between rival unions or moderate wage demands, and labor unrest remains likely during upcoming negotiations over recognition and wages," Mark Rosenberg, a senior Africa analyst at Eurasia Group, wrote in a note to clients.

Labor rivalry spurred President Jacob Zuma to appoint Deputy President Kgalema Motlanthe to broker a solution by hosting the talks between the unions and companies. Disputes have led to three worker deaths since May and cut 0.3 percentage point off growth this year. That followed the killings of at least 44 people, including 34 killed by police in one day, near the South African operations of Lonmin Plc, the third-largest platinum producer, last year.

AMCU leaders left yesterday's meeting in Pretoria, the capital, without signing. Other labor organizations, mining companies, and government departments signed the pact.

"There's a high probability we're going to see strikes across the mining sector simply because the guys want money and the operators can't afford to give it," said Maurice Mason, a London-based mining analyst at Peel Hunt LLP.
Objections Raised

The rand depreciated 0.2 percent 10.0688 per dollar at 9:58 a.m. in Johannesburg, extending its drop this year to 16 percent, the most among 16 major currencies tracked by Bloomberg.

"We're leaving," AMCU President Joseph Mathunjwa said yesterday when asked whether the union would sign the accord.

The union raised objections over the dismissal of about 1,000 of its members at Glencore Xstrata Plc's South African chrome mines and the loss of jobs at the Vaal River operations of AngloGold Ashanti Ltd. this year, Lesiba Seshoka, spokesman for the rival National Union of Mineworkers, said at the meeting. The AMCU also spoke out against the NUM's Labour Court application on the validity of membership forms at Lonmin, and asked to consult with members on the pact, he said.

"They've got other issues but they're raising them at the wrong platform," Seshoka said.

A previous attempt to restore peace in mines in the nation, which has the world's biggest known reserves of platinum, failed even as all unions, including the AMCU, and the biggest mine operators agreed to the pact, which Susan Shabangu, the country's mines minister, brokered in February and March.

No Option

"Failure is not an option as this will accelerate the creeping destruction of one of South Africa's most important industries and inhibit the investment support that the country so urgently needs," Bheki Sibiya, chief executive officer of the Chamber of Mines, which represents companies in the industry, wrote July 2 in the Johannesburg-based Business Day newspaper.

Falling precious-metal prices and higher costs have squeezed South Africa's gold and platinum producers, who are facing demands from labor unions to as much as double wages for entry-level workers. More than half of South Africa's gold and platinum operations are in loss-making positions, Sibiya said.

Yesterday's pact sets out processes that will see that all parties working together to ensure stability in mines, according to a statement handed to reporters in Pretoria.

The "government will act decisively to enforce the rule of law, maintain peace during strikes and other protests relating to labor disputes, ensure protection of life, property and the advancement of the rights of all," it said.

The AMCU's leadership asked to be given the chance to consult with its members, Motlanthe said.

"They have nothing against the framework," Motlanthe told reporters, referring to the AMCU. "It is theirs as much as it is ours. They had no preconditions. Investors are not interested in this document, they're interested in a stable mining industry."

--With assistance from Kevin Crowley and Paul Burkhardt in Johannesburg. Editors: Stephen Cunningham, John Viljoen.

South Africa's AMCU refuses to sign mining pact

Sherilee Lakmidas


3 July 2013

PRETORIA - South Africa's Association of Mineworkers and Construction Union (AMCU) refused to sign a government-brokered stability pact on Wednesday aimed at defusing tensions in the mining sector ahead of tough wage talks.

The unrest, which has shaken the industry for the last 18 months, is rooted in a turf war between AMCU and the National Union of Mineworkers (NUM), a political ally of the ruling African National Congress.

Question marks hang over the latest government effort to bring peace to the shafts after an earlier peace pact was roundly ignored and as worker militancy rises when commodity prices are falling and company margins are being squeezed.

Gideon du Plessis, the general secretary of the Solidarity trade union which represents mostly skilled workers, said AMCU had a set of preconditions it wanted met before signing.

Deputy President Kgalema Motlanthe, who is the government's point man on the mining crisis, told journalists AMCU wanted to consult its members first.

"Investors are not interested in this document, they are interested in a stable mining industry which operates within the framework of the law," he said.

More than 50 people were killed in mining unrest last year that cost gold and platinum producers billions in lost output and led to credit downgrades to Africa's largest economy and the government is keen to bring stability back to the sector ahead of elections next year.

(Reporting by Sherilee Lakmidas; writing by Olivia Kumwenda; Editing by Ed Stoddard)

Pay raise prevents De Beers strike

Ana Komnenic

5 July 2013

De Beers miners were set to strike Friday afternoon over wages when their employer - the world's largest diamond miner - agreed to 9% pay raises, South Africa's National Union of Mineworkers (NUM) told Bloomberg.

Strikes were scheduled in mines across several provinces, including Free State, Northern Cape and Limpopo but were called off when negotiations succeeded.

NUM had taken worker's complaints through the Commission for Conciliation, Mediation and Arbitration (CCMA), a labour dispute resolution body, but had received a certificate of non-resolution to the dispute at which point they announced strike action.

The union had demanded a 13% wage increase while the company had offered 6%. Miners were also asking for extra leave days and were granted across-the-board increases of two days.

De Beers' South African mining operations employ 2,550 people, 1,300 of which are NUM members, a company spokesman told Bloomberg.

South Africa's gold producers may face tougher battles than De Beers in the future. A fast-growing labour coalition, the Association of Mineworkers and Construction Union, recently called on gold producers to more than double the wages of entry-level miners. In May NUM called for 60% wage increases for gold miners.

South Africa's NUM to give De Beers strike notice


4 July 2013

JOHANNESBURG (Reuters) - South Africa's National Union of Mineworkers is giving diamond producer De Beers, a unit of Anglo American, a 48-hour strike notice after mediation failed to resolve a wage dispute, NUM General Secretary Frans Baleni told Reuters on Wednesday.

Baleni said the "strike will likely commence on Sunday or Monday but we are open for negotiations to avoid the strike." De Beers said in a statement it could also lock out union members.

Labour unrest and wildcat strikes have rocked the platinum and gold sectors periodically over the past 18 months in Africa's largest economy, with the violence rooted in a turf war between NUM, which was once unrivalled, and the upstart Association of Mineworkers and Construction Union (AMCU).

But NUM's dispute with De Beers is following legal channels and so is unlikely to unnerve jittery investors who are more focused on upcoming wage talks in the gold, platinum and coal sectors which are seen as among the toughest ever.

AMCU refused to sign a government-brokered stability pact on Wednesday aimed at defusing tensions in the mining industry ahead of those talks.

In the case of NUM and De Beers, the talks went to mediation after the union dropped its wage hike demand to 13 percent from 17 percent while the company stuck to a 6 percent offer.

De Beers said there had been agreement on "the broader issues in the wage negotiation" but no deal could be reached on other, unspecified demands.

De Beers produced 4 million carats of diamonds in South Africa last year, out of the total of 27.9 million carats it produced worldwide.

4,000 strike at Anglo American Platinum mine once again

Cecilia Jamasmie

14 June 2013

Workers at Anglo American Platinum, the world's largest platinum producer, staged a sit-in strike at one of the company's underground mines in South Africa on Friday in protest of the firing of several of their leaders, a union representative told AFP.

Between 3,000 to 4,000 people were striking at Amplats' Thembelani mine in Rustenburg, said an Association of Mineworkers and Construction Union (AMCU) spokesman, adding that at least 2,400 of them were being held down in the mine by colleagues.

"There is zero tolerance to any illegal actions which include intimidation, threats of violence and assault," Anglo American Platinum said in a statement.

"Our protection services teams are on the ground attending to the situation. Management is currently engaging with recognized unions at regional and at head office levels to resolve the situation," it said.

AMCU and rival union the National Union of Mineworkers (NUM) have been in a bloody war for dominance at the mines that has resulted in violent strikes and assassinations.

The incident is the latest wildcat action to hit South Africa's platinum belt. The country, Africa's largest economy, accounts for 75% of world PGM output.

The nation's mining sector, which accounts for 6% of gross domestic product, has been repeatedly hit by disputes over low wages that reflect widespread anger over enduring inequalities in the economy.

Amplats workers end underground protest


15 June 2013

JOHANNESBURG - Anglo American Platinum said on Saturday operations at its Thembelani mine in South Africa were back to normal after a "group of employees" on Friday prevented 2,400 workers from going above ground.

"The situation at the mine is normal, people came above ground yesterday evening," Amplats spokeswoman Mpumi Sithole said.

The industrial action followed the dismissal of four union shop stewards for "inappropriate behaviour".

Lonmin will seek court order against strike by AMCU

André Janse van Vuuren & Kamlesh Bhuckory


13 June 2013

Lonmin Plc, the world's third- largest platinum producer, said it will seek a court order to prevent a possible strike by the biggest union at its operations.

The Association of Mineworkers and Construction Union said earlier it will serve Lonmin a 48-hour strike notice if the company doesn't agree to its demands. The parties met yesterday and were unable to resolve a deadlock on the provisions of a labor-recognition agreement.

"From our position a strike will be illegal," spokeswoman Sue Vey said by phone. "We will apply for an interdict to reserve our rights."

The union wants organizational privileges at the Marikana mine near Rustenburg, 116 kilometers (72 miles) northwest of Johannesburg, at the expense of the National Union of Mineworkers, an ally of the ruling African National Congress. The AMCU has unseated the NUM as the biggest union at the three- biggest platinum producers in South Africa, which has the largest known reserves of the metal.

The change isn't yet formally recognized by Lonmin, which says it favors multi-union representation. A strike would disrupt operations at Lonmin's 13-shaft Marikana mine, the site of violent protests in which at least 44 people died last year, slowing plans to raise output and restore profitability.

Delivery of the notice will depend on whether Lonmin agrees to the union's demands today, AMCU General Secretary Jeff Mphahlele said by phone.

Bargaining Forums

The union wants to negotiate on behalf a bargaining forum where higher-skilled workers are represented and where AMCU has a limited number of members. The NUM and two other unions, Solidarity and UASA, hold recognition agreements for this unit, where each represents more than 20 percent of employees. The AMCU speaks for more than 70 percent of the lower-skilled workers at Lonmin, with negotiations taking place in a separate bargaining forum.

UASA Mining Head Franz Stehring and Solidarity Deputy General Secretary Gideon du Plessis said Lonmin yesterday gave them assurances that the company will honor their recognition pacts.

"Any new agreement with AMCU may not infringe on the existing agreements Lonmin has with us," Stehring said by phone.

A labor court ruled in May NUM has until July 16 to regain its majority among the entire workforce.

Lonmin employs 27,000 staff and a further 10,000 contractors. The AMCU represents 70 percent of lower-skilled workers at the company.

--Editors: Ana Monteiro, Hilton Shone

Lonmin/AMCU in talks to avert strike


11 June 2013

JOHANNESBURG - Platinum producer Lonmin and South Africa's Association of Mineworkers and Construction Union (AMCU) were in talks on Tuesday to avert a strike, a union official said.

AMCU wants to be recognised as the majority union at Lonmin as it now represents over 70 percent of the workforce at the world's third largest producer of the precious metal. AMCU has threatened to down tools at the mine this week if talks fail.

"The strike has already been decided, the meeting is to try and avert it," AMCU treasurer Jimmy Gama told Reuters.

"If we are unable to reach an agreement today, the notice (to strike) will be served tomorrow," he said. The company has said such action would be deemed an illegal strike as the matter is set to go to arbitration later this month.

Lonmin's mines were shut for weeks by an illegal strike in 2012 and were the centre of last year's violence in the platinum belt, which saw 34 miners shot dead by police in a single day in the worst security incident since the end of apartheid.

AMCU, which has emerged as the dominant union in the platinum shafts after a bloody turf war with the once unrivalled National Union of Mineworkers (NUM), has also led two brief wildcat strikes at Lonmin this year, most recently last month.

Lonmin said last week it had increased security at its mines, which are only found in South Africa, in response to violence and labour strife.

Workers from both unions are still getting killed. Last week a NUM shop steward was shot dead at a Lonmin mine, weeks after an AMCU organiser was murdered in a tavern.

South Africa adopts hard-line stance on labour relations

Kerry Hall

13 June 2013

South Africa is moving ahead this week with efforts to stabilize the country's mining industry.

President Jacob Zuma said Wednesday he would push a hard line on labour disputes in the mining sector which have been causing uncertainty in the country's economy, reports Reuters.

Addressing parliament, Zuma said people who commit crime in the name of labour relations would face the full might of the law and police have been given a no-tolerance directive.

Additionally, he said the government wouldn't come between or take sides in the competition for members between the Association of Mineworkers and Construction Union and the National Union of Mineworkers. reports that Deputy President Kgalema Motlanthe will meet Friday with business, labour and government representatives and ask them to avoid any crisis in the mining sector.

The government said the talks would look at what necessary action is needed to stabilize both the industry and the economy, as well as ensure that all parties abide by the law.

It also said it would step up the police presence in Rustenberg, where two mineworkers were killed in recent shootings.

Last year, during a labour strike at the Marikana platinum mine, 44 people were killed, many shot by police, which is now being probed by a judicial inquiry commission.

Home | About Us | Companies | Countries | Minerals | Contact Us
© Mines and Communities 2013. Web site by Zippy Info