Lonmin deal stirs more mine strife

2012-09-19 13:30

Marikana - Police fired tear gas on Wednesday to disperse protesters near a mine run by top platinum producer Anglo Platinum [JSE:AMS] (Amplats), the first sign of unrest spreading after strikers at smaller rival Lonmin [JSE:LON] won big pay rises.

Within hours of Lonmin agreeing to a pay increase of 11% to 22%, workers at neighbouring mines were calling for similar hikes, suggesting more trouble in store after six weeks of industrial action that has claimed 45 lives and threatened Africa’s biggest economy.

“We want management to meet us as well now,” an organiser for the militant Association of Mineworkers and Construction Union (Amcu) at Impala Platinum [JSE:IMP] (Implats), the number two producer, told Reuters.

“We want R9 000 a month as a basic wage instead of the roughly R5 000 we are getting.” He declined to be named for fear of recriminations from the company.

Lonmin shares soared more than 9% to levels not seen since police shot dead 34 miners on August 16 outside its Marikana mine, 100km northwest of Johannesburg.

However, the deal could add 13% to the company’s recurrent costs, plus an additional R82.35m ($10m) for a one-off back-to-work bonus, Nomura said in a note. Lonmin is already battling with a shaky balance sheet and unprofitable shafts.

The settlement has also sown more strife in the area, with police clashing with an angry crowd in a township at a nearby Amplats [JSE:AMS] mine outside the “platinum belt” city of Rustenburg.

Police spokesperson Dennis Adriao said officers fired tear gas, stun grenades and rubber bullets to disperse an “illegal gathering”. He had no information on any casualties.

A labour activist said workers who have stayed off the job at Amplats, which accounts for 40% of global supplies of the metal used for catalytic converters in cars, were inspired by Lonmin and would press on with their demands.

"The mood here is upbeat, very celebratory,” Mametlwe Sebei, a community representative near Rustenburg, told Reuters. “Victory is in sight. The workers are celebrating Lonmin as a victory.”

Amplats had to suspend its Rustenburg operations last week because of the unrest. Those mines restarted on Tuesday but the company admitted many workers had stayed away.

Platinum prices rose a little on Wednesday after falling 2.6% a day earlier on news of the Lonmin deal.

Lonmin workers celebrate

At Marikana, strikers celebrated their settlement as a triumph for Amcu, which exploded onto the South African labour scene in January when its turf war with the dominant National Union of Mineworkers (Num) led to a six-week closure of the world’s largest platinum mine.

Thousands of Lonmin workers and their families gathered at a soccer pitch near the mine to sing victory songs and denounce Num, a key ally of the ruling African National Congress (ANC).

“Amcu is coming. We told them and they are coming,” one of the chants ran. One man held up a banner reading: “Death Certificate; first name: Num; cause of death: corruption”.

The discontent rolling through the sector has found fertile ground in the shanty-towns that ring the mines.

“The ripple effects will continue to be felt. The outcome of the negotiation at Marikana will likely set a new benchmark for mining more generally and wage costs are set to rise substantially,” JP Morgan said in a research note.

Amplats and Implats shares were up 0.1% and 0.5% respectively at 12:10.

Wage hikes in the mining sector have been leap-frogging inflation for years, reducing margins in the industry as productivity has struggled to keep pace. 

But the typical miner has several dependents to feed and so pay rises that outpace inflation may not go far as the gains evaporate at the kitchen table. Racing food inflation due to soaring global grain prices will only stoke workers’ hunger.  

The gold sector has also not been spared, with 15 000 miners at the KDC West operation of Gold Fields [JSE:GFI], the world’s fourth largest bullion producer, on an illegal strike.

Gold Fields’ chief executive Nick Holland told Reuters on Tuesday his company could “go on for quite some time” despite the KDC West disruption.

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  • ken.rowe.509 - 2012-09-19 13:39

    " Back to work bonus" what a disgrace. They should be fired.

      gary.scande - 2012-09-19 13:45

      I want a back to work bonus every monday

      punkdrachel - 2012-09-19 14:10

      I wish I knew before I studied for 4 years that I would get more money in unskilled labour.

  • Bra Tebzaah Sibilanga - 2012-09-19 13:47

    Miners should not be blamed.Had the mine bosses paid these workers decent salaries from the onset,there wouldn't be so many strikes.Its the mine bosses who set this precedent,not the workers.

      Bok.tjop - 2012-09-19 14:00

      Bla bla bla

      pieter0827006294 - 2012-09-19 14:01

      So we agree it's Cyril Ramaposa's(Union/Owner of Lonmin) fault. Then why did Malema call the "boers" to the table?

      maree.cassie - 2012-09-19 14:13

      You must be joking???

      nun.chuck.7 - 2012-09-19 14:29

      Are you telling me that R8800 entry level salary at a mine isn't considered decent? If so then I would hate to know what you earn.

      merven.halo - 2012-09-19 15:29

      @Bra - the moment the miners started with violence and murder I lost all sympathy with them.

  • jan.human - 2012-09-19 13:50

    28 mil? Means 14000 workers?Possible?

      chris.debeer.14 - 2012-09-19 13:56

      R82 Mil and 41,000 workers.........

  • zaaristotle - 2012-09-19 13:55

    The R2000 bribe to return to work is pathetic. Every strike in every industry is now probably going to be ended with a bribe. This increase should never have been granted, it only shows and inspires others that lawlessness, violence and anarchy pays.

      lizette.wilsenach - 2012-09-19 14:21

      They better pay the other mine's workers the same before they have to strike for it. They do the same work.

  • william.letsong.5 - 2012-09-19 13:57

    Violent protest pays off. This country is run by fools.

  • klaas.waarzegger.7 - 2012-09-19 14:00

    Am I correct in saying that mine workers at lonmin is now earning roughly the same as teachers?

      william.letsong.5 - 2012-09-19 14:07

      Yes and more than most in the Police Force and many other \workers\ in the SANDF.

      denis.dendrinos - 2012-09-19 14:27

      No. I know a few teachers, and some earn as little as 8k.

      merven.halo - 2012-09-19 15:56

      Just a matter of time and all will turn to violent protests, from teachers to police officers to medical staff.

  • marie.comyn.5 - 2012-09-19 14:01

    In terms of the agreement, the lowest underground worker would now earn R9611 (up from R8164), a winch operator would earn R9883 (up from R8931), a rock drill operator would earn R11,078 (up from R9063) and a production team leader would earn R13,022 (up from R11,818). What happened to the workers earning only R 4000 per month.

      dnxumalo2 - 2012-09-19 14:19

      marie.comyn.5- R4000 per month you can give to your gardener.

      nun.chuck.7 - 2012-09-19 14:35

      Apparently R4500 is what they were left with after deductions. I would really love to see one of their pay-slips to see what all these deductions are. It seems excessive. Any in case, I don't see how your net pay after deductions is the mines fault. R8100 for an entry level position seems more then fair. It's more then I earn :-/ .

      william.nigh.5 - 2012-09-19 15:37

      The deductions are NUMs cut, which goes to Cyril's pockets, even though he is a major shareholder in the mine as well. That's what the miners were angry about and why they got violent. They were being ripped off by the very people that were supposed to represent them (NUM) and the employer (Lonmin) was turning a blind-eye becuase that was the dshaky deal they had negotiated with Cyril in order to get ANC backing & support. A shocking abuse of the infrastructures of the struggle. The unions are outdated and the traditional structures need to be pulled down because they are ALL corrupt. That's why AMCU was born & more power to them. 36 people had to die before those poor miners got the world's attention & ordinary South Africans should support them because they are the ones who are taking on this corrupt government & laying down their lives to do so.

      merven.halo - 2012-09-19 15:57

      The R4000 a month was clearly a lie.

  • william.letsong.5 - 2012-09-19 14:02

    Violent protest pays off with a back to work bonus. We are lead by a gang of incompetent clueless fools.

  • hester.matmer.3 - 2012-09-19 14:07

    This is just going to This is just going to spread to other industries. What happens next year and the year after?

      brendon.g.lambert - 2012-09-19 15:23

      The mines have cut backs and 1000's lose their jobs.

  • Erna - 2012-09-19 14:11

    Is anyone surprised?

  • irvin.mkhari - 2012-09-19 14:15

    SA govt gave permition to kill miners when protest for better wages but SA is a democratic country,where is democracy,freedom and rights of citizens in this context? if they have rights why people killed for protesting for better wages?

      brendon.g.lambert - 2012-09-19 15:27

      So this is all governments fault again...really what about the security gaurd and policemen they hacked to death. They should all give the increase to the families of these deceased as compensation.

  • dnxumalo2 - 2012-09-19 14:20

    Good to see people getting paid what they deserve.Their children can now prepare for varsity.

      anton.vonvielig - 2012-09-19 14:33

      true, but if they have 8 this will not happen.

      genet.joobs - 2012-09-19 15:02

      What do their children need to go to varsity for if you can earn this much as an unskilled labourer?

  • fouriejn - 2012-09-19 14:26

    It might be a good time to be the owner of a liquor store in their area

  • glen.e.huysamer - 2012-09-19 14:30

    I celebrate the Lonmin settlement, it should have been done long ago without the need for anybody being killed. I still believe however that the miners deserve more and I hope that in future mine management will continue to settle wage disputes above or on parr with inflation, and invest as much money into the people of South Africa as they do in digging holes in the ground.

  • anton.vonvielig - 2012-09-19 14:31

    good, but now that management came to the party by giving these okes a massive increase, the workers must increase their productivity by at least 300 to 400%, or else the mine's wage bill cannot be sustained and the mine will close. Very simple, I hope they understand this concept.

  • denis.dendrinos - 2012-09-19 14:33

    I just hope they pay tax now. That's probably the only positive to come from this - more tax to be used by the government on bettering peoples lives, building and improving roads, power stations, prisons, water treatment plants and making sure kids are educated and have decent clas.......oh wait....... bwaahahahahahhaahahahahahahahahahahahahaha

  • gwilym.howes - 2012-09-19 14:49

    Lonmin sold out, and the other Platinum producers will now pay the price. But beware, Lonmin, your turn will come around again - probably sooner that you think / hope. You should have stuck to your guns. This will not end until some company has the guts to tough it out and break these strikers once and for all.

      steve.gibson.146612 - 2012-09-19 15:37

      Did anyone read that new wage negotiations are scheduled to begin in October???????

  • gwilym.howes - 2012-09-19 14:51

    HOW can a Company accept people back at work after they marched with Pangas and Spears and threatened death and mayhem? What possible worker replationship can remain after that? What a whore is the Company that will welcome them home with a huge increase and actually pay them a bonus for what they have done. Lonmin, you deserve any and all furture labour strife that comes your way. You have NO credibility or respect left!

      denis.dendrinos - 2012-09-19 15:58

      Check the guys smile in the pic? All friendly and "peaceful" now, but for the last month it was violent, malevolent, hateful and angry. Two faced much? How do you trust anyone like that?

  • sudhir.hira - 2012-09-19 15:04

    NEWSFLASH: No need to go to school. Become a miner and earn as much as a skilled educated worker.

      sudhir.hira - 2012-09-19 15:08

      and if you want a pay rise, strike and increase your salary by another 80%, and top that you get paid while you strike. Perfect job being a miner or part of a UNION

  • gert.venter.35 - 2012-09-19 15:11

    Glad for the guys getting more money, i think they do hard, dangerous work. Very worried about the precedent, though. If this is how wages are going to be negotiated in SA going forward, local and aspacially foreign investors are gonna have to think long and hard before employing people here.

  • retlaw.yelmoc - 2012-09-19 15:18

    There goes industrial relations and peacefull negotiations, and about 100 000 jobs! Well done to all concerned!!

  • wo0two0t - 2012-09-19 15:41

    Bunch of animals.

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