The Chamber of Mines is keeping a close watch on developments at Harmony Gold’s troubled Kusasalethu mine, near Carletonville, fearing that contagious worker unrest there could spread throughout the industry if not nipped in the bud.
The industry, which returns to work on Monday, is on tenterhooks, not knowing whether the wildcat strikes that plagued gold and platinum mines last year will continue into this year. Last week, National Union of Mineworkers (NUM) general secretary Frans Baleni was already picking up rumours of further strikes in the offing by workers who felt their wage expectations had not been met.
Members of the Chamber of Mines will meet early this week to share information and decide on a way forward, the chamber’s senior executive for employment relations, Elize Strydom, said on Friday. A meeting with unions might be considered to establish a modus operandi, especially in the light of coming wage negotiations.
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A repetition of last year’s disturbances, which shaved 0.5 percentage points off South Africa’s projected growth in gross domestic product, knocked export earnings and caused severe jitters among foreign investors, would be very harmful for the country.
Another reason for likely turbulence in relations in the mining sector this year is the fact that the two-year wage agreement for gold and coal mines comes up for negotiation in June. This is likely to fuel the bitter inter-union rivalry between the NUM and the relatively new Association of Mineworkers and Construction Union (Amcu), which was a feature of last year’s Marikana tragedy, in which 46 miners died.
Amcu has made strong membership gains and has undermined the long-held NUM monopoly over the industry’s workers and there are concerns the turf war between the unions will continue to destabilise production this year. Labour expert Andrew Levy said there was no doubt this would be a "difficult, troubled" year for the mining industry.
A London-based emerging markets economist at Nomura International, Peter Attard Montalto, agreed. "We see quite a high chance of further unrest, given our view that the issues during 2012 were structural rather than one-off. We think the underlying tensions between Amcu and NUM will remain and both will be pushing strongly for higher wage settlements, particularly after Amcu’s success on this front in 2012 versus NUM’s relative failure.
"The possible likely scenarios include NUM going aggressive and possibly violent to begin with, or else - more likely still - we see NUM attempt a ‘normal’ wage round, workers are dissatisfied, and Amcu and others whip up a second, violent wage round once again. Overall, the lesson of 2012 was that violence does beget further large wage increases as well as return-to-work bonuses to cover the cost of time striking - a very bad incentive for 2013."
However, Cadiz Corporate Solutions mining analyst Peter Major believed post-Mangaung labour conflict will be more contained and less chaotic than last year and would be more firmly managed by the government and the unions now that leadership positions in both had been consolidated. Amcu was definitely a "wild card", however, and was likely to be a source of instability in the sector.
Ms Strydom said the chamber was waiting to hear from Harmony today about developments at Kusasalethu. She stressed that something would have to be done to address union rivalry, "as we cannot have this level of violence, intimidation, total disregard for the law and collective agreements, and lack of respect for property and the safety of co-workers. It cannot be tolerated and we will need to do what has to be done."
Harmony Gold, South Africa’s third-largest gold producer, decided to delay the post-festive-season reopening of Kusasalethu mine last week despite the daily loss of production amounting to millions of rand. Spokeswoman Marian van der Walt said this was so that Harmony could "review its financial and operational status" after the strikes last month and devise a strategy to deal with the inter-union conflict.
The first priority, she said, was to ensure the safety of employees, something that could not be guaranteed at that stage. Ms van der Walt expected clarity on the situation this week.
Kusasalethu has been plagued by violent clashes between the NUM and Amcu, which has applied for recognition by Harmony Gold. Ms van der Walt said a process of membership verification was under way. The mine’s 5,000 workers were sent home a day earlier than expected on December 21 after an underground sit-in by 1,700 workers, who demanded the reinstatement of about 580 workers suspended because of their participation in an illegal strike on October 25.