Mail & Guardian

Amplats mines 'belong to the nation'

18 Jan 2013 00:00 | Matuma Letsoalo, Charles Molele, Chantelle Benjamin

Amplats workers in Rustenburg refused to go underground on Wednesday in protest at the company's plans to mothball four mine shafts and shed 14000 jobs. (Oupa Nkosi, M&G)

Amplats workers in Rustenburg refused to go underground on Wednesday in protest at the company's plans to mothball four mine shafts and shed 14000 jobs. (Oupa Nkosi, M&G)

The ANC won't hesitate to push for Anglo America Platinum's licence to be revoked as punishment for the company's decision to retrench 14 000 workers.  

"What Amplats has done is an act of provocation," said Enoch Godongwana, chairperson of the ANC national executive committee's economic transformation ­subcommittee. He said Amplats was in "breach of agreement" with the government.

Two years ago the company applied for the conversion of its licence and presented the department of mineral resources with a 50-year plan, according to Godongwana.

The decision to restructure was not in line with that agreement, he said.

"We told them that we reserve our right [to take the mining licence]," he said. "We have not taken the decision to do that, but we are saying to them we disagree with them."

Amplats announced that it would put its four shafts under maintenance and care as part of restructuring, a decision Godongwana said the ANC would not permit.

"Now they are saying they are going to take those mines and not sell them to anybody because they don't want competition.

Proposed nationalisation
"But it is not theirs. It belongs to the South African nation. That is out of the question; it's not going to happen."

Godongwana, who was president Jacob Zuma's pointsman in the ANC to ensure that the motion on the proposed nationalisation of mines was defeated, hinted that the government might have to consider ­giving the licence to another company willing to mine the four shafts that Amplats wants to close.

"If they can't produce, somebody else must be given the opportunity to produce. We reserve the right [to take appropriate action] in order to defend the interests of the country. We have told them so. We've told Chris Griffiths [Amplats chief executive officer] about it."

He said, although the government understood that platinum prices had "collapsed", it was not up to Amplats to take a unilateral decision about job cuts.

"If there's any crisis for Amplats,  or for Anglo American for that matter, making a decision of that ­magnitude without any proper consultation with the government on the structural problems they are facing is wrong. They should have consulted so that we're able to work together and, if possible, see how we can avert the loss of jobs."

Godongwana said it was shortsighted for the government to allow foreign companies to list on both the JSE and other countries' stock exchanges.

"With the benefit of hindsight, it was an error to agree for these companies to have dual listings and make no conditions. We now have people taking decisions in London where they don't even produce gold or platinum."

Nationalisation of mines
But the government was going to "review our relations with Anglo American", he said.

These comments from Godongwana and those of Mineral Resources Minister Susan Shabangu, who said she would be considering a review of Amplats' mining rights, indicate that the brief respite between the mining sector and government is over.

There was a collective sigh of relief from the mining sector and investors when the nationalisation of mines was rejected at the ANC's national conference in Mangaung in December. The move was seen by the business community and investors as heralding a new era for the sector, and for a few weeks peace reigned.

This week, the very public spat between Shabangu and Griffith developed rapidly. The minister, obviously surprised by the extent of the lay-offs, first described the decision as "irresponsible" and then a day later referred to Griffith as being "arrogant". She was clearly angry about what she saw as Amplats making a unilateral decision to cut 14 000 jobs and close operations without consulting the unions and government.

By Thursday, the Association of Mineworkers and Construction Union (Amcu) was calling for nationalisation and the withdrawal of mining licences for mothballed shafts, and for these unused shafts to be reallocated (See "Amplats should cut costs rather than retrench, says Amcu").

A threat to review the mining licence of the platinum arm of South Africa's largest employer, Anglo American, which has a long history in South Africa and runs a number of premium brands in the country, could also have implications for future investment by the company.

However, there is little doubt at this stage that Amplats could have handled something "as delicate as this" better, as Old Mutual's mining analyst, Ian Woodley, put it.

Murmur from the government
Harmony's announcement earlier this month that it might have to consider a substantial retrenchment of 6 000 workers and initiate procedures in terms of section 189 of the Labour Relations Act was met with not a murmur from the government.

The reason was that Harmony did not present a restructuring plan before attempting negotiations, suggesting that it was open to discussions about the number of retrenchments.

Amplats, just weeks away from presenting what are expected to be dismal financial results, appears to have been under pressure to present its restructuring plan before then.

The downside was that it gave the minister a week's notice and, despite beginning a section 189 process on the day of the announcement, presented what she saw as a final document on its restructuring plans.

Ebrahim Fakir, a political analyst, said, although he was not in favour of the government telling the private sector what to do, "it's just the way Amplats handled the matter that could have been improved.

"The mining sector has long been seen as behaving with a level of impunity and acting in their own interests," he said.

Fakir said a stronger National Economic Development and Labour Council might have prevented the situation Amplats and the government now found themselves in.

Modest rise
"They might have been able to strike a deal that would have satisfied both sides," he said.

He also said that labour had failed to consider the difficult situation the sector was in.

"Labour, and here I am talking about Amcu, needs to understand that, if the mining companies give in to higher wages, the mines will cut jobs.

"The National Union of Mine­workers has been trying to stymie the job bloodbath and ensure a modest rise in salaries."

Fakir was also sceptical about Amplats' plans to reskill workers to enable them to enter new jobs or establish enterprises.

"I am not sure this will benefit workers. It will take about three to six months for workers to be trained and, in the meantime, they are ­living off their retrenchment packages," he said.

Employment task team
At the same time, Fakir said, companies operating in South Africa, which were not currently creating local jobs and putting all their efforts into expanding into other markets, needed to set aside some of their savings to look at ways to keep jobs.

Shabangu criticised Amplats' failure to make use of the mining industry growth, development and employment task team, set up in 2008 jointly by labour, mining and the government to ensure restructuring of the industry and reduce job losses.

Griffiths has said that he had not meant to undermine the task team, but the plight of the platinum sector had been on the table for some time.

This week he also defended the company's decision to make its restructuring plan public, saying that it was complying with JSE regulations that require that information relevant to the company be made public.

The government's response to the announcement has also been criticised.  

Peter Leon, head of mining and energy projects for law firm Webber Wentzel, said he found the government's immediate response to review Amplats' mining licence as irresponsible.

"Given the situation the industry is now in and three rating agencies downgrading South Africa, it could not have come at a worst time," he said.

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