Platinum mines under fire

May 14 2017 06:15
Justin Brown

Tough economic times coupled with raising unemployment are seeing platinum mines facing escalating community protests.

Protesters block access to the mines, stopping employees from going to work.

These disruptions are causing losses in production, millions of rands in earnings being forfeited and more jobs to be shed.

This adds to the woes of the sector that has also been devastated by labour strife, including the Lonmin strike in August 2012 that saw 34 mine workers shot dead by police, as well as the Association of Mineworkers and Construction Union strike in 2014 that went on for five months – the longest wage strike in local history – which lost the industry and workers tens of billions in earnings.

The platinum sector has experienced platinum prices that have languished at long-term lows and, together, these factors have resulted in many mines experiencing significantly reduced profits and even losses.

The platinum price on Friday was quoted at $918 (R12 270) per ounce, down from over $1 700 (R22 700) per ounce in early 2013.

This week Lonmin said it had seen violence, damage to property and intimidation of its employees near its Marikana operations by Bapo Ba Mogale community members.

The protest action by the community started on May 2. On May 5, the company was granted a High Court interdict against the protesters.

“The company has met on three occasions with a delegation claiming to represent the unemployed young people of the Bapo Ba Mogale community,” Lonmin said.


The Bapo has demanded the creation of 1 000 permanent jobs and 500 cadet placements at Lonmin for community members.

“These demands are not realistic in the current economic climate and cannot be acceded to without threatening the sustainability of the business,” Lonmin said.

Last year, the preliminary findings of former public protector Thuli Madonsela’s investigation into allegations of maladministration of the Bapo Ba Mogale’s royalties since 1994 found that more than R600 million of it had been pillaged.

Other platinum producers such as African Rainbow Minerals, at its Modikwa platinum mine near Steelpoort in Limpopo, and Impala Platinum (Implats), at its Two Rivers mine in Mpumalanga and its Marula mine in Limpopo, have been affected by community protests and anger.

Civil unrest in the Steelpoort area has also hit Northam Platinum’s Booysendal mine, which is close to the town of Mashishing.

In March, African Rainbow Minerals chairman Patrice Motsepe warned that relations between communities and local mines had reached a critical level.

Motsepe said at the time that the civil unrest from the local communities had become an industry-wide issue.

The Bench Marks Foundation’s lead researcher, David van Wyk, said on Friday that, when mining companies were setting up their social and labour plans as part of an application for new order mining rights, they made many empty promises to the local communities.

One of these promises was related to jobs.

Difficulties at mines

However, the mining companies usually imported skilled labour from outside of the local area, Van Wyk said.

“The promises made to communities about jobs are disingenuous,” he said.

The platinum industry was particularly in trouble as the platinum boom ended in 2009.

“The platinum sector is in decline, especially in Rustenburg,” Van Wyk said, amid thousands of jobs being cut at platinum mines.

The tough times for platinum meant that relations between mines and the adjacent communities were set to get worse as mines would cut social spend, health and safety costs, as well as environmental expenditure before embarking on further retrenchments.

No one in government appeared to be bothered about addressing the difficulties at platinum mines as “all they wanted to do was to become mining billionaires” and “they had sold their souls to the devil”, Van Wyk said.

Roger Baxter, Chamber of Mines CEO, said that there was an increasing trend of community protests that were having an impact on local mines.

However, Baxter said the primary source of the protests, unless there were specific cases related to mining issues, were largely related to community discontent with municipalities, service delivery and broader social unhappiness.

“Mining is not immune to these protests,” he said.

In many rural areas, mining was the major economic contributor to jobs and so these mines ended up being a “useful conduit” for community discontent.

Community members

Baxter said community service-delivery protests were happening throughout the country.

Protests that impact local mines were obviously reducing production and earnings, he said.

Economic circumstances, particularly the high level of unemployment, could be translating into higher levels of community discontent, Baxter said.

Implats said last month that community disruptions at Marula and Two Rivers during the first quarter of the year had affected production.

“Operational performance at Marula has been severely disrupted by community protest action during the quarter and for the first nine months of the 2017 financial year,” Implats said.

The protest action was directly related to “certain community members” being dissatisfied with the way in which the community’s 50% interest in the Makgomo chrome project was being managed by their elected representatives.

Partly as a result of the disruption by community protests, Implats has embarked on restructuring at the Marula mine, where more than 1 000 jobs could be lost.

Civil unrest in the Steelpoort valley has occasionally resulted in production losses at the Booysendal mine when passage for employees was too dangerous, Northam said last August.

Read Fin24's top stories trending on Twitter:

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest. 24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

implats  |  lonmin  |  amcu  |  thuli madonsela  |  bapo ba mogale  |  platinum



Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Add your comment
Comment 0 characters remaining

Company Snapshot

We're talking about: MINI BUDGET

Finance Minister Malusi Gigaba has laid bare South Africa's economic woes. Visit our Mini Budget Special for all the action.

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Free education in South Africa is:

Previous results · Suggest a vote