Union rivalry deepens gloom in SA mining industry | Fin24
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Union rivalry deepens gloom in SA mining industry

Apr 19 2016 08:50

Johannesburg - The decline of the National Union of Mineworkers (NUM) is eroding one of the pillars of the post-apartheid economy and deepening woes plaguing the country’s biggest export industry.

Confronted with surging power costs and government pressure to increase their black shareholding, the contest among labour groups for members and support marks an unwelcome development for the companies that extract gold and platinum because it may make unions more militant and escalate wage demands.

“There’s no question that inter-union competition ups the ante,” Andrew Levy, the managing partner of Andrew Levy Employment who has advised companies on labour relations for more than 30 years, said by phone. “It’s a turf war.”

Even without labour upheaval, the growth prospects in Africa’s most industrialised economy are looking dire. The National Treasury expects the economy to expand less than 1% this year, undermining efforts to cut a 25% unemployment rate, while the nation’s credit rating is on the brink of being downgraded to junk.

The risk of political turmoil is also rising as calls mount for President Jacob Zuma to resign or be fired after he was found by South Africa’s top court to have violated the constitution.

Biggest strike

As recently as four years ago, NUM was South Africa’s largest union, with a legacy of standing up to white minority rule in the 12 years between its founding and Nelson Mandela’s election in 1994. Its leaders have included Deputy President Cyril Ramaphosa, former president Kgalema Motlanthe and Gwede Mantashe, the secretary general of the ruling African National Congress. In 1987, it led a strike that was joined by more than 300 000 workers, one of the biggest in the nation’s history.

Now it’s losing ground to the Association of Mineworkers and Construction Union (Amcu); membership has plummeted to about 195 000, from 310 000 in 2012. Besides miners, Amcu has signed up steelworkers, security guards and factory workers, taking its membership to about 180 000, according to its president Joseph Mathunjwa, who founded the group in 2001, two years after his expulsion from NUM.

NUM has also been weakened by the firing of tens of thousands of its members in response to the commodity price slump. The mining industry employed 462 000 people in the final quarter of last year, 5.9% less than in the same period the year before, and down from a peak of more than 800 000 in the 1980s, according to the national statistics agency. Mining production fell for a sixth straight month in February, contracting an annual 8.7%, the agency’s data shows.

Amcu has grown through the downturn by capitalising on worker discontent with NUM, according to Bennie Linde, a professor at the North West University’s School of Human Resource Sciences in Potchefstroom.

“NUM members thought that their leaders became too close to management and the government,” he said by email. Amcu “focused on developing a reputation as a trade union not led ideologically, but rather to keep its members’ mandate”.

As a member of the Congress of South African Trade Unions, a key ANC ally, NUM’s decline adds to the party’s struggle to contain Zuma’s troubles. The ANC is at risk of losing control of several cities including Johannesburg and Pretoria in August 3 municipal elections after the Constitutional Court last month ruled that Zuma breached the law by refusing to repay taxpayer funds spent on upgrading his private home.

Xolani Bokoloshe, a 40-year-old safety auditor at Sibanye Gold who was a NUM member for 12 years, is among those who switched to Amcu.

“People lost trust in NUM,” Bokoloshe, who’s Amcu’s regional chairperson in the Free State province, said in an interview.  “That union is dead. We’re waiting for the day of the funeral.”

NUM’s influence and reputation took a major blow in 2012, when rock drillers at Lonmin’s Marikana mining complex chose to represent themselves in wage talks and went on strike to demand a minimum monthly wage of R12 500.

The police shot 34 of them dead after they refused to disperse - the most deadly action by security forces since apartheid ended. Mathunjwa played a leading role in trying to avert the violence, and NUM subsequently lost its majority to Amcu on most platinum mines.

“Labor relations in significant parts of the mining industry have become more complex, as events since 2012 have shown,” Elize Strydom, chief negotiator for the Chamber of Mines, whose members include Anglo American [JSE:AGL], Impala Platinum Holdings [JSE:IMP] and Lonmin [JSE:LON]. “On balance, after a rough couple of years, we believe that on the whole both the industry and the unions have made progress towards more stable outcomes.”

Platinum miners

While Amcu’s support is concentrated on the platinum mines, it is also making headway among gold miners. It has recruited about 44% of the workforce at Sibanye Gold [JSE:SGL], the largest producer of bullion from South African mines, roughly the same as NUM.

On April 11, Amcu negotiated a three-year wage deal with the company under the threat of a strike that was a modest improvement on one struck by NUM last year. Its members voted to accept the offer by a show of hands at Sibanye’s Driefontein operations near Carletonville, west of Johannesburg, and burnt a coffin draped in NUM t-shirts.

Unlike NUM, Amcu cares about its members and has a president who maintains contact with the workers, said Bokoloshe, who attended the vote wearing a suit with a pin bearing Mathunjwa’s image on the lapel and a black Amcu cap. “The way Amcu is moving, I feel that I’m in the right union, I’ve made the right decision,” he said.

William Mabapa, NUM’s deputy general secretary, acknowledged that a lacklustre economy, job losses and competition from other unions have been taking their toll.

A study commissioned by NUM found that “it is true that we are losing touch with the workforce”, he said in an interview. “That is the reality. We are working on that issue.”

amcu  |  num  |  unions  |  mining


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