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Lonmin deal not lasting solution, MPs told

Sep 19 2012 17:26 Sapa

Company Data

Lonmin plc [JSE:LON]

Last traded 32.83
Change 1.08
% Change 0.03
Cumulative volume 1344583
Market cap 18.73bn

Last Updated: 17/10/2014 at 04:28. Prices are delayed by 15 minutes. Source: McGregor BFA

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The Lonmin [JSE:LON] pay deal did not necessarily mean the wage issue at South African mines had been settled, research group the Bench Marks Foundation said on Wednesday.
 
Briefing Parliament's mineral resources portfolio committee, head researcher David van Wyk said South Africa could not afford to look away, as the same situation could repeat itself next year.
 
Van Wyk said recent remarks by those in the mining industry perhaps indicated a shift.
 
He quoted acting CEO of Lonmin mines Simon Scott, as telling an international mining conference that "the industry must stop dictating to communities and take their lead from them".
 
Van Wyk said this shift would disappear unless focus was maintained on the problem.
 
"If a rock driller has been working for Lonmin for 15 years and is still living in a shack, that's a problem," he said.
 
He said many shack dwellers were subcontracted labourers.
 
"The subcontractor makes a deal with the mining company and pockets most of the money - and doesn't pay the rock drill operator (enough)."
 
This was a huge problem that needed urgent attention.
 
"He (subcontractor) makes a huge profit out of the situation while those he subcontracts live in appalling conditions..." said Van Wyk.
 
Mineral resources committee chairman Fred Gona, welcomed the foundation's report on living conditions in mining communities, saying it confirmed what MPs found when they went on oversight visits.
 
"We couldn't understand, because that's where our mineral wealth comes from... people living in close proximity to mines are trapped in abject poverty," said Gona.
 
He was glad the report covered not only conditions at Marikana but also at several other platinum mines in the North West, including Anglo Platinum, Impala, Aquarius, Xstrata, and Royal Bafokeng mining.
 
He described the earnings of CEOs when compared to ordinary miners as "obscene".
 
"… Somebody is earning something like R37m, one person in (a) year, and the bulk of these workers are earning far less..."
 
Gona criticised what he described as the "capitalist system being used in this country".
 
"If we don't pay attention to that we will see more of the Marikana situations erupting in our faces."
 
Van Wyk made a plea to mining companies to ensure stability among workers. "A stable labour force is going to cost a bit more, but it's also going to be more profitable," said Van Wyk.
 
He drew MPs' attention to the Japanese and German economies, which were highly productive after crumbling during World War Two.
 
"Your productivity tends to increase faster than your labour costs if you pay workers more and you have better living conditions."
 
Van Wyk said, unlike South Africa, these countries understood that productivity was a result of conditions under which workers lived.
 
"You cannot be a productive worker if you live in a zinc shack, and you are inhaling smoke every night to keep you warm, and it messes up your lungs."
 
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