Miners earn a R7000 'pittance'

At the centre of the protest was the pay of rock drill operators, who earn a basic salary of R5 890 but are entitled to several additional allowances. (AFP)

At the centre of the protest was the pay of rock drill operators, who earn a basic salary of R5 890 but are entitled to several additional allowances. (AFP)

Striking workers at Lonmin's Marikana mine claim they earn a pittance, but the numbers show that platinum rock drill operators take home between R6 700 and R7 400 each month.

Striking rock drill operators at the  Marikana mine, where 34 people were shot dead last Thursday, have repeatedly told reporters they earn R4 000. But trade union Solidarity, in a statement released on Tuesday, said the wage was R10 500.

Lesiba Seshoka, spokesperson for the National Union of Mineworkers, agreed: "I don't think what has been reported is accurate. Even a beginner rock drill operator earns R4800 excluding benefits."

Wage negotiations on platinum mines are not legislated and, with no centralised bargaining council in place, company-specific agreements settle on different rates and benefits.

But to retain staff, major platinum miners had to match wages and benefits, said Johan Theron, head of personnel at Impala Platinum.

An industry source provided the Mail & Guardian with the wages earned by rock drill operators at Lonmin and Anglo Platinum, Theron volunteered the information for Implats employees.

At Lonmin, the basic salary for a rock drill operator is R5 890 a month, the holiday allowance R490, housing allowance R1 950 and an added rock drill operator allowance R750.
After 18% tax the worker gets R7 450. Lonmin then pays an additional R873 into a provident fund and R556 for medical aid. There are minor deductions such as union fees and for the unemployment insurance fund.

At Anglo Platinum the figures are similar with a basic of R6 061, a housing allowance of R1 737, holiday allowance of R505 and an added rock drill operator allowance of R750. Before tax the salary is R9 053 and after tax it is R7 420.  

More than R900 is also contributed to a provident fund and R700 to medical aid.

A rock drill operator at Impala Platinum earns a basic wage of R6540 with an added holiday allowance of R545 and a standard living-out allowance of R1 850 each month. The employee pays 18% (R1 608) in tax as well as a 7% (R625) contribution to their retirement fund, resulting in a net wage of about R6 700. Impala also contributes R1 050 to a provident fund for each worker, who also receive free medical aid and subsidised medical aid for their family.

There are incentive programmes at all three mines that allow rock drill operators to earn extra by reaching productivity targets.

At Impala, a rock drill operator can earn up to R6 000 a month through such a programme.

At Lonmin, individual bonuses recently averaged R1 057 each month and an average of R1862 in incentive bonuses for teams.

Theron said personal indebtedness on the mines was a big problem and common deductions to wages included garnishing orders as well as debt owed to shops on the mines.

Striking rock drill operators at Lonmin, and now at some Anglo Platinum mines, are demanding R12500 in wages.

The National Union of Mine­workers and platinum producers such as Impala have long been lobbying for a central bargaining system. It was only last week, following 44 deaths at Marikana, that Mineral Resources Minister Susan Shabangu set up a task team to look into forming such a council.

This proposal will undoubtedly stir up some objections - most likely from smaller platinum companies, which think it is unfair that industry standards, tailor-made for multinational miners, should be forced on them.

"It presents challenges for companies that are not operating at the same level [as the country's largest platinum producers]," said Seshoka.

A central bargaining council may not necessarily yield higher wages. According to bargaining indicators from the Labour Research Service, minimum wage levels tend to be higher in bilateral agreements than in centralised bargaining agreements.

Data on minimum wages by sub-sector showed the minimum wage in platinum was one of the highest at just above R4 100 in 2010. Gold, for example, was R3 500.

Bilateral negotiations
"Although centralised bargaining agreements cover a far greater ­number of workers than any one bilateral agreement, this does mean that bilateral negotiations necessarily yield better results than centralised bargaining," the labour research service said.

"The history of industrial relations and struggle at a company and the profitability of the industry involved are important factors."

Peter Major, an analyst at Cadiz Corporate Solutions, noted that for the past decade there had been cost increases of more than 18% each year in the platinum industry, but no corresponding productivity increase.

Implats's 2011 annual report showed labour costs had increased 10% year on year, yet productivity had slowed.

At Lonmin, employee costs and salaries increased from $590-million in 2010 to $700-million in 2011.

Amplats last year reported a 9% wage increase, well above the annual inflation rate.

Lisa Steyn

Lisa Steyn

Lisa Steyn is a business reporter at the Mail & Guardian. She holds a master's degree in journalism and media studies from Wits University. Her areas of interest range from energy and mining to financial services and telecommunication. When she is not poring over annual reports, Lisa can usually be found pottering about the kitchen. Read more from Lisa Steyn