Platinum, new innovation, wage talks and Ramaphosa. A lot is happening in the mining world.
Four buses filled with delegates travelled to see Anglo American’s latest technology at one of its more advanced platinum operations in its portfolio of South African assets after investors the world over had urged miners to get out of the country following the Marikana tragedy that took place 10 years ago.
The miner was launching a hydrogen-powered hauler, making a break from its diesel powered trucks, which account for more than 70% of diesel consumption on-site.
On 16 August this year, South Africa will mark 10 years since the tragedy that took place at the now defunct Lonmin mine, Marikana, where 34 mineworkers were killed and 78 seriously injured in confrontation with the police. The event served as a watershed in the country’s history as investors turned negative on the country’s economy, exacerbated by the growing evidence of corruption reaching the highest echelons of political office.
The issue with platinum mining in South Africa is that the platinum belt — in North West and Limpopo — is on land controlled by chiefs who lease mining rights and land to large private corporations in return for payments.
This causes volatility in the industry as the allure of platinum has also drawn in thousands of migrants. But instead of finding economic opportunities, the burgeoning population has poor service delivery and unemployment rates in excess of the national average, the Mail & Guardian previously reported.
The rand, a bellwether of sentiment towards not only the South African story but emerging market countries as a whole, has depreciated over the past 10 years. The tragedy on the platinum belt brought an end to any of the positive sentiment that existed in the aftermath of the soccer World Cup.
In the wake of the tragedy that coincided with sluggish commodity prices as the world was groggily recovering from the 2008 global recession, miners such as Anglo were pressured into reviewing their South African portfolio of assets. A year after the events of that winter afternoon, Mark Cutifani, who had just been appointed as the 105-year old miner’s chief executive, began a review of assets.
Anglo subsidiary Anglo American Platinum offloaded three of its loss-making and labour intensive platinum mines to the Neal Froneman-led Sibanye-Stillwater in 2015 for more than $100-million.
The sales left Anglo with only three platinum operations in the Bushveld Complex — Mogalakwena mine and the Amandelbult complex, which is made up of Dishaba and Tumela mines, and Mototolo mine — with a combined workforce of 23 000.
In comparison, Sibanye has a workforce of some 81 862 employers locally with 46 385 being in PGM operations.
These structural reforms in the mining sector happened as South Africa’s unemployment rate ballooned to a record high of 35.3% for the fourth quarter of 2021.
Veteran mining engineer and analyst Peter Major explained that Anglo American had more platinum assets than other companies put together and, at the time they sold their platinum assets, companies were showing big losses. The group realised it might be a good time to clean up its portfolio.
“They were the earliest, the biggest, most diverse mining group and so could make the decision of letting go of some mining assets. They cleaned up the oldest ones, the ones that were going to take the most money and the most work to make profitable and they kept the juiciest ones.”
Major said Anglo American let go of its underground mines because they have a lot of red tape compared with open pit mines. Underground mines need more manpower so they employ 10 times the number of people than an open pit mine.
“Investors will only give you money for open pit mines now, because the government has made underground mining so difficult and so expensive that nobody wants people. So, the less people they have the better … unfortunately lots of people means lots of headaches.”
South African platinum miners and unions are entering crucial wage talks over a multiyear pay deal in June and the volatility is already rearing its head, with Sibanye boss Froneman saying the recent strike at its gold mines is being used as leverage by unions for upcoming wage negotiations at its platinum operations.
“The platinum sector is making decent money compared to the gold sector and I think the unions know that. The miners are trying to tell the unions that the current platinum prices are not normal. Miners refuse to get locked into high wages that are unjustified by productivity. Unions need to be able to justify their pay increase … it will be tense,” Major said.
The Marikana strikers back in 2012 demanded a basic wage of R12 500. With the current wage talks, mineworkers are demanding up to R20 000. The talks will be more intense given Sibanye-Stillwater’s financial reports, which show it earned more than R300-million in 2021.
The National Union of Mineworkers (NUM) told the Mail & Guardian that it is already negotiating with Anglo Platinum and that their wage demand is a 10% increase. The union said it has rejected the 7.5% offer by Anglo Platinum.
The NUM media officer, Luphert Chilwane, said: “We expect the company to give workers what they rightfully deserve. It is important to understand that workers sweat day in, day out making huge profits for such companies, while others lose their lives in the process. Why should it be a problem when they have to be rewarded for their blood and sweat.”
Striking mineworkers stormed the stage earlier this month on Workers’ Day when President Cyril Ramaphosa gave a speech in Rustenburg. It’s an area that is a pressure point for Ramaphosa, because he was a non-executive director of Lonmin at the time of the Marikana massacre.
While giving his address at Anglo’s launch of its new hydrogen-fuelled haulage truck, Ramaphosa said: “There are companies who relate to trade unions with hostility; that should be a thing of the past. As stakeholders we must work together and not hold on to dustbin history. They should work together, whether discussing environmental issues or wage matters.”
In not so many words Ramaphosa was addressing the tension between the Association of Mineworkers and Construction Union and Sibanye-Stillwater as they navigate wage negotiations.
Wage talks in this sector take place just as the country welcomes back the annual Mining Indaba in Cape Town after a two-year hiatus caused by the Covid-19 pandemic. With platinum and commodity prices much more buoyant than they were 10 years ago, investors are going to be keen to hear of the temperatures in the platinum belt.
Ten years on from Marikana, South Africa’s miners may be in much more profitable position than in years past, but socioeconomic conditions have worsened in the areas they operate as the economy continues to struggle.
Anathi Madubela is an Adamela Trust business reporter at the M&G.
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