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Labour Wrap:
Because of the economic system in which we operate, there will probably be tens of thousands of job losses in the mining sector over the next year or so, says Terry Bell in his latest Labour Wrap.
It will take considerable innovative thinking to reach a compromise that will mollify both capital and labour.
Bell says this is the background to the crisis talks convened this week by mineral resources minister Ngoako Ramathlodi. However, he feels that such talks should have been held much earlier since it was obvious that a crisis was looming.
He argues that the prime responsibility here lies with government that, within a parliamentary democracy, has to strike a balance between its needs for voting support from the mass of miners and funding support, through tax receipts and otherwise from the mining companies.
Currently, workers have a little more leverage because the government is under pressure and losing support while local government elections are scheduled for next year. The unions, he says are demanding — and deserve — a decent living wage and better conditions. But the companies, at a time of a downturn in commodity prices, say they cannot afford the levels of increase demanded by the unions. This is a classic stalemate.
However Bell hopes that there will be fully frank and open discussions at the crisis talks and that mining companies will be wholly transparent about their books. He points out that the unions are aware that the costs to companies is in rands, while their income is in US dollars.
He adds that, ten years ago, the peak price of gold was $510 and $1 bought R6. Today, the gold price is more than $1 100 and $1 fetches R12.70. This equates to a 2005 gold price of R3 000 and a current rate of more than R12 000.
This, and the huge pay packets to company executives is what angers many miners who daily risk their lives for what they see as pay that is barely adequate even at the upper levels.
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* Terry Bell is a political, economic and labour analyst. Views expressed are his own. Follow him on twitter @telbelsa.
