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Cape Town - There is a stalemate in the mining industry, especially with regard to gold where miners are demanding a deserved, decent, living wage while the mining companies, faced with falling commodity prices, maintain they cannot afford anywhere near the demanded pay rises.
The miners’ unions point out, correctly, that in the boom times of recent years, when profits were high, their members did not benefit; now that there is an economic pinch, the companies wish to retrench them.
However, there are other factors to bear in mind, not the least of which is the Rand to US dollar exchange rate: most costs are for labour and these are paid in the local currency, while income is in US dollars. Today, $1 fetches R12.70; ten years ago, the rate was $1 to R6, a 111% increase. At the same time, the gold price reached a high of $510 in 2010, while the price this week was R1 094, having fallen from $1 307 in January.
While it is probably true that several shafts and mines are currently unprofitable, it is beholden on the companies to open their books as part of tripartite talks between them, government and the unions. Transparency is called for. I don’t think it is in the interests of any of the parties to see mines close down or retrench thousands of miners. This would contribute towards further social and economic havoc from which mo-one will be immune.
This market system in which we operate demands that companies maximise profits for shareholders and that unions do the same for the pay and benefits of their members. Government is supposed, in this situation, to act as the regulator. As such, a levy on profits during boom times could have been established, since this system is always prone to booms and slumps.
Companies too, had they taken a comprehensive long term view rather than prioritising profits on a quarter by quarter, let alone year by year basis, could also have made contingency plans to avoid the disruption and social upheaval that massive job losses could cause.
The National Union of Mineworkers, the major union in all sectors until recently, also allowed many of its office bearers and shop stewards to fall prey to the blandishments of the companies, so perhaps blunting their militancy. There now exists an element of inter-union rivalry that is of no benefit to miners.
However, the talks that are underway now are better late than never. But it will require some innovative thinking and carefully weighed compromises if a solution is to be found. If it is not, and the current round of planned retrenchments proceeds, others will follow, exacerbating what is already a social and economic situation of crisis proportions.
