South Africa: Widespread industrial unrest returns to the mines

Published by MAC on 2014-01-22
Source: Reuters, Mining.com, Daily Maverick, Bloomberg

Mining strikes coming to S. Africa may cause permanent damage to industry

Cecilia Jamasmie

Mining.com

21 January 2014

South Africa is about to be hit, once again, by a major strike over wages across its gold and platinum sectors after the Association of Mineworkers and Construction Union (AMCU) - the country's fastest-growing mining labour coalition- called miners to down tools by first shift Thursday.

About 100,000 miners are expected to go on an indefinite strike beginning Jan. 23, with gold producers Harmony Gold, Sibanye Gold, and AngloGold Ashanti, as well as platinum producers Lonmin, Impala Platinum and Anglo American Platinum being the most affected.

With unstable gold prices, companies closing mines and several firms claiming to be operating at a loss, the announced labour action is likely to lead to "even more job losses and even some mine closures," the Chamber of Mines (CoM) chief negotiator Elize Strydom, told MiningWeekly Tuesday.

The situation is so critical for the gold sector, that the chamber has asked a South African court to rule Wednesday whether the strike called at the nation's largest producers is or not legal and therefore, whether it can proceed.

"The order of the court will be followed," AMCU President Joseph Mathunjwa told Bloomberg. "It goes both ways. If the court rules in our favour then the gold companies should respect that as well," said the leader of this union, which represents about a fifth of gold miners in South Africa.

Platinum the most affected

William Tankard, research director of precious metals mining Thomson Reuters GFMS says investors should keep an eye on platinum, as it is the metal that will be most affected.

"The influence of AMCU within the South African mining sector is more extensive within the platinum industry than is the case with gold," he told Kitco News. "This potential disruption is greatly more pertinent to the PGM space than it is to gold."

Anglo American Platinum and Lonmin have scheduled meetings with the union in a bid to reach an agreement before Thursday, local reports say.

"The negotiations are ongoing. They [Amcu] stated they intend to go on strike on Thursday morning, so we shall wait and see what happens," Lonmin's Sue Vey told Sapa news agency.

South Africa, Africa's largest economy, holds about 80% of the world's known platinum reserves and is the fourth-largest gold exporter.

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AMCU to strike at world's top 3 platinum miners

Zandi Shabalala & Ed Stoddard

Reuters

20 January 2014

RUSTENBURG, South Africa - The main trade union for South African platinum miners will strike next week at the world's top three producers, hitting over half of global output and the margins of companies struggling to make profits.

A simultaneous stoppage at the three producers would hit a key South African export at a time when the rand currency is near five-year lows, and deal a fresh blow to investor confidence in Africa's biggest economy.

Renewed labour unrest would also be an unwelcome distraction for President Jacob Zuma and his ruling African National Congress (ANC) ahead of general elections expected in three months.

Members of South Africa's Association of Mineworkers and Construction Union (AMCU) voted overwhelmingly on Sunday to strike at world No. 1 producer Anglo American Platinum (Amplats) in a show of hands in a stadium in the platinum belt city of Rustenburg.

Around 15,000 miners had piled into the stadium in a display of force ahead of the industrial action.

In recent days, AMCU members also voted to strike at Amplats' rivals Lonmin and Impala Platinum (Implats).

AMCU president Joseph Mathunjwa told the rally that Amplats would be served notice of the strike action on Monday and workers would down tools on Thursday.

The union said last week it would do the same at Lonmin and spokesman Jimmy Gama told Reuters after the mass meeting that Implats would also get its notice on Monday.

"Comrades, let's intensify the struggle for a better wage," Mathunjwa, a charismatic lay preacher who has styled himself as a Christian warrior waging class war for South Africa's black workers, said to roars of approval from the crowd.

He earlier swept into the stadium in a brand new Lexus car, flanked by three burly white bodyguards, to a rock star welcome and wild cheers from AMCU members, most of whom were clad in the union's trademark green shirts.

Such a display of wealth and power is sure to be fodder for the critics of AMCU, which poached tens of thousands of members from the once unchallenged National Union of Mineworkers (NUM) in part by exploiting rank and file perceptions that its rival had grown too close to management.

Its turf war with NUM has killed dozens of people and sparked a wave of wildcat strikes in 2012 that pushed Amplats, a unit of Anglo American, into the red that year.

But AMCU has been playing by the rules and has permission from a government mediator - a legal requirement in South Africa - to proceed with the strikes, provided it gives the employers notice of at least 48 hours.

The union conflict also has political implications as NUM is a key ally of the ANC and speakers criticised the ruling party.

Madiba Bukhali, a regional AMCU leader, told the rally that miners had put the ANC in parliament "but now they have forgotten us, now that they are out of this hole."

"Zuma, we voted for him but he has built a huge house and forgotten his neighbours," he said, referring to a $21 million state-funded security upgrade to the president's private home that has been widely criticised by the South African press and opposition parties.

Living Wage

At Amplats and Lonmin, the union is seeking a minimum monthly wage of 12,500 rand ($1,200) for entry-level workers - more than double current levels, under the populist battle cry of a "living wage". At Implats the union scaled back its demand late last year to just over 8,500 rand.

Companies have said they can ill afford steep increases as power and other costs soar against the backdrop of depressed prices for the white metal used in emissions-capping catalytic converters in automobiles.

Platinum's spot price shed 11 percent last year and is about 40 percent down from record peaks scaled in 2008.

AMCU is also under pressure to deliver on its promises now that it is the dominant union on the platinum belt, setting the stage for a bruising showdown between capital and labour.

Miners may struggle to hold out without pay if the strike becomes protracted. The typical South African mine worker has eight dependants, many of whom are peasants in rural areas far from the shafts. This stokes their demands but also means they cannot survive for long without an income.

But AMCU is known for its discipline and militancy.

Over half of global platinum supply will be halted and around two-thirds or more could be impacted if the strike includes Amplats' joint venture partners, though it is not clear if that will be the case.

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Sick mine workers neglected - time to compensate them

By Ryan Boyko, Seyward Darby, and Rose Goldberg for GROUNDUP.

Daily Maverick

21 January 2014

South Africa - Far from the bustling streets of downtown Johannesburg, much of it built by the bounty of South Africa's gold mines, thousands of former mineworkers suffer from painful diseases contracted on the job. These men labour to breathe, their lungs degraded by the occupational diseases of silicosis and tuberculosis.

The men's bodies waste away, making even simple household chores painful, and paid work all but impossible. Many of them will die from their illnesses, leaving destitute families behind.

For many mineworkers, disease is the only lasting thing they bring home from the mines. Although they are owed government compensation, few ever receive it. For decades, both government and industry have largely ignored their plight.

This unacceptable neglect is correctable. Our report offers constructive, informed suggestions for reform based on a hard look at the failing compensation system.

Mineworkers actually have special legal rights to compensation, yet they are still denied their vital benefits. According to South African law, mineworkers who acquire silicosis or tuberculosis while employed by gold companies qualify for benefits, including money from government compensation coffers. Funding is supposed to be provided by the mining industry for the explicit purpose of helping men and their families cope with occupational disease. But every step of the process mineworkers must go through to access this compensation is broken. As a result, according to recent estimates, more than 700,000 cases of statutorily compensable lung disease in former mineworkers remain unpaid.

South African law treats mineworkers differently from workers in other sectors, guaranteeing them less compensation for lung disease. Moreover, the government coffers that do exist for mineworkers are woefully underfunded. The lump sum payments mineworkers or their families receive, between R48,000 and R180,000, is inadequate, comprising less than a year's income and benefits for a median mineworker. An enormous backlog of claims means that only a small percentage of those who apply for compensation ever get even this. In one recent year, the government accepted 28,161 claims while paying only 400.

The Medical Bureau for Occupational Disease (MBOD) is largely responsible for this shamefully low payment rate. MBOD is the government agency responsible for certifying occupational lung disease in mineworkers, and it is ill-equipped to fulfil its narrow but important mission. Its offices have towering stacks of claim records requiring evaluation, including records filed as far back as the mid-20th century.

Despite cheaply available fingerprint identification software, the MBOD still uses a time-consuming process of manual fingerprint comparison, requiring a full workday to process a single set of fingerprints. This step alone limits the government to paying only a few hundred claims per year.

The entire claims process is riddled with such flaws. Proving both illness and employment requires documentation many men do not have, as well as expensive, difficult journeys to visit mining offices or doctors. Although South African law requires free medical exams for former mineworkers, they are often unavailable for men outside cities and for migrant mine workers from Swaziland and Lesotho.

The government also requires that the families of mineworkers who die before having their illnesses certified send the deceased's cardiorespiratory organs to Johannesburg for examination. This is a logistically and emotionally difficult proposition that can serve as a barrier for people whose cultural beliefs prevent autopsy or for those far away from organ collection bins.

Such a complex tragedy of a system might seem impossible to reform. But there are concrete steps, outlined in our report, that can be taken to ensure that mineworkers and their families are treated with dignity and fairness. Our analysis is based on interviews with occupational disease experts, labour and health rights advocates, government officials, and mineworkers and their families. We also examined compensation systems in several other countries, to provide a comparative perspective highlighting components of successful compensation schemes that could work in South Africa. We prepared this report under the umbrella of the Global Health Justice Partnership, an initiative at Yale University.

With increased financing from mining companies, mobile clinics coupled with targeted outreach efforts, increased payments including pensions, and reform of government bureaucracy, including better accountability mechanisms, South Africa could create a fair system of compensation for its miners.

Nothing can make up for the years of life lost by those who have suffered waiting for these changes. The promises of the past are irrevocably broken. But reforming the South African compensation system today would go a long way toward ensuring better, healthier lives for mineworkers and their families tomorrow. It's time to start fulfilling broken promises. DM

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South Africa's AMCU says members vote to strike at Implats

The company said it was still working to avoid a stoppage and hoped for more talks.

Ed Stoddard

Reuters

13 January 2014

JOHANNESBURG - South Africa's Association of Mineworkers and Construction Union (AMCU) said its workers had voted in favour of a strike over wages at Impala Platinum (Implats), the world's second-largest producer of the metal.

"They said to go on strike," AMCU spokesman Jimmy Gama said on Monday. He did not provide any other details or say when the strike was due to start.

The company said it was still working to avoid a stoppage and hoped for more talks.

"We remain committed to finding a sustainable resolution and remain hopeful that strike action can still be averted," Implats' spokesman Johan Theron said.

A state mediator has given AMCU approval to launch strikes at Implats as well as industry leader Anglo American Platinum and the third-largest producer, Lonmin Plc.

A simultaneous strike at all three companies would hit at least half of global platinum production and could take out as much as two-thirds if Amplats' joint venture operations are also affected.

At Amplats and Lonmin, the union is seeking a minimum monthly wage of 12,500 rand ($1,200) for entry-level workers at Amplats and Lonmin - more than double current levels. AMCU says this amount would be a "living wage".

For Implats, the union late last year scaled back that demand to just over 8,500 rand.

AMCU will canvas its members at Lonmin and Amplats, a unit of global mining group Anglo American, later this week. The union will hold a media briefing in Johannesburg on Wednesday about its current round of wage negotiations.

AMCU has emerged as the dominant union on South Africa's platinum belt over the past two years after wresting tens of thousands of members from the once unchallenged National Union of Mineworkers (NUM) in a violent turf war in which dozens of people were killed.

On another labour front in the platinum belt, NUM said on Monday it had met with mid-tier platinum producer Northam Platinum for further talks to end a wage strike there that started in early November.

NUM has scaled back its initial demands, some of which exceeded 40 percent, and said the company was still offering increases of 8 percent and 9 percent, still well above inflation of 5.3 percent.

"We will convene a mass meeting of our members on Wednesday, and they will give us a mandate on whether to end the strike or not," NUM spokesman Livhuwani Mammburu said.

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NUM, Amplats reach 2-year wage deal

Reuters

13 December 2013

JOHANNESBURG - South Africa's National Union of Mineworkers (NUM) said on Thursday it had agreed a two-year wage deal for pay increases of 7.5 to 8.5 percent with Anglo American Platinum, the world's top producer of the precious metal.

NUM's rival the Association of Mineworkers and Construction Union (AMCU), which became the majority union at Amplats last year during a bitter turf war for members, remains deadlocked in wage talks with the company.

NUM spokesman Lesiba Seshoka told Reuters his union had been taking back members in recent months but could not provide an exact percentage for its representation at Amplats.

Officials at Amplats, a unit of global mining group Anglo American, were not immediately available for comment.

NUM's agreement throws down a challenge to its enemy AMCU to deliver results. Seshoka said the increases, which are above the current inflation rate of 5.3 percent, applied only to NUM members.

AMCU officials also could not be reached.

Under the battle cry of a "living wage," AMCU has been pushing for a minimum monthly wage of 12,500 rand ($1,200) for entry-level workers from Amplats and rival Lonmin - more than double current levels. It is also seeking big increases from Impala Platinum.

Companies say they cannot afford big pay hikes as they grapple with low prices and high costs which have made half of the industry's shafts unprofitable, according to analysts.

AMCU emerged as the dominant union on South Africa's platinum belt last year after it wrested tens of thousands of members from the once unchallenged NUM in a violent struggle for members in which dozens of people were killed.

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AMCU now represents 60% of Amplats' miners

Reuters

13 December 2013

JOHANNESBURG - Anglo American Platinum , the world's top producer of the precious metal, said on Friday the hardline AMCU union had increased its membership in its shafts to 60 percent from 40 percent in July.

Company spokeswoman Mpumi Sithole also told Reuters that a wage deal agreed this week with AMCU's rival the National Union of Mineworkers, only applied to it, two other unions and non-unionised miners.

The pay hikes range from 7.5 to 8.5 percent, far short of the more than doubling of entry-level wages AMCU is demanding. (Reporting by Ed Stoddard; Editing by Olivia Kumwenda-Mtambo)

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AMCU wins permission to strike over wages at Lonmin

Reuters

11 December 2013

JOHANNESBURG - South Africa's Association of Mineworkers and Construction Union (AMCU) has been given permission by a government mediator to call a strike over wages against world No. 3 platinum producer Lonmin, the union said on Tuesday.

AMCU spokesman Jimmy Gama said the union would consult its members soon about a possible strike at Lonmin, and that miners there could down tools before Christmas or next year.

Analysts have said a strike is more likely in 2014 as workers will be extremely reluctant to embark on industrial action just ahead of the Christmas holidays, when shafts typically close or work at reduced volumes.

AMCU, known for its uncompromising stance in wage talks, already has permission to call strikes at the world's two top producers of the precious metal, Anglo American Platinum and Impala Platinum (Implats).

A simultaneous strike at all three would hit at least half of global platinum production and could take out as much as two-thirds if Amplats' joint venture operations are impacted.

The union has cut its demands to Implats but is still after a minimum monthly wage of 12,500 rand ($1,200) for entry-level workers from Amplats and Lonmin - more than double current levels - under the populist battle cry of a "living wage."

AMCU emerged as the dominant union on South Africa's platinum belt last year after it wrested tens of thousands of disgruntled members from the once unrivaled National Union of Mineworkers in a vicious turf war in which dozens of people were killed.

Data on Tuesday showed South Africa's mining production rose 22 percent on a year-on-year basis in October, underscoring the impact of last year's often violent stoppages which also hit gold and iron ore operations.

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The Massacre in Marikana

Questions raised about role of British company in South African mining massacre

by Maeve McClenaghan and David Smith

Bureau of Investigative Journalism

24 November 2013

On 16 August 2012 the summertime sun streamed through the leafy canopy of Green Park and into the windows of the Belgravia headquarters of platinum mine company Lonmin plc. But 5,500 miles away there was a chill in the air as the company's biggest South African mine became a frenzy of activity.

Striking workers had gathered for the eighth day in a row at the Marikana mine, while media crews watched from nearby. Four thousand rounds of live ammunition were delivered and ambulances rolled ominously into place. As the cameras flashed, Zukiswa Mbombo, police chief of North West province, announced: "Today is D-day: we are ending this matter."

By nightfall, 34 striking miners had been shot dead and 78 wounded in the bloodiest security crackdown since the end of apartheid.

As the country tried to make sense of the events, blame was apportioned to police, the unions involved and the striking miners themselves.

But 15 months on from the massacre, executives from British-owned Lonmin, which counts the Church of England Commissioners and several UK borough councils among its shareholders, have not yet been called to appear before the official commission of inquiry into the massacre.

Related article: Concerns among Lonmin shareholders as Bureau releases investigation

Now, evidence examined by the Bureau of Investigative Journalism raises new and potentially damaging questions about the relationship between Lonmin, the company at the centre of the strike, the police and the government.

A transcript of a meeting between Lonmin and police submitted to the inquiry suggests company officials worked with police chiefs to formulate a joint plan to break the strike. The investigation has also found that company executives lobbied politicians and police chiefs to ramp up the police presence and that the company provided resources and intelligence to the police. The research has also shed light on the political and financial pressures that the company was facing at the time.

Rehad Desai, spokesman for the Marikana Support Campaign, said: "It all starts adding up to a very poisonous picture which undermines the very fabric of South African democracy. If true, this is an outrageous collusion that adds up to a huge injustice."

Lonmin grew out of mining firm Lonrho, the company that owned the Observer from 1981-93. In 1999, Lonrho was renamed Lonmin. Earlier this month the company announced its end-of-year results, recording a profit and increased production for 2013.

The company came to international attention last year when the week-long strike came to its bloody climax. There is no suggestion that either the police or Lonmin officials intended for shots to be fired that day. However, evidence now shows that on 14 August, just two days before the massacre, there was a joint agreement between the company's management and police that the strike should be broken in a decisive manner.

The details of this meeting have only just surfaced. A transcript submitted to the commission shows provincial police chief Zukiswa Mbombo in discussions with three Lonmin employees, including head of security Graham Sinclair and executive vice president for human capital Barnard Mokwena.

In the meeting, the group discuss the political and industry pressures influencing the situation. The group also discuss a similar strike that had happened at another South African-based mine, Impala Platinum, six months earlier. There the strike resulted in the company giving in to workers' demands for a wage increase, and the establishment of a new union at the mine, the Association of Mineworkers and Construction Union (AMCU).

Lonmin's chief executive at the time, Ian Farmer, attended a presentation by Impala in which they discussed what had happened. Farmer told the Bureau that Impala's agreement to a wage increase "rippled through the rest of the industry and "created an expectation".

In the meeting on 14 August, Mbombo notes that Lonmin should learn lessons from Impala, and take care to not look sympathetic to the AMCU rather than the established union, the National Union of Mineworkers (NUM) - which was an ally of the African National Congress.

The group also recall that political points were scored at the Impala strike by outspoken politician Julius Malema, who was pushing for nationalisation of the mines. The transcript records Mbombo noting that what they do at the Lonmin mine "has a serious political connotation that we need to take into account ... we need to act such that we kill this thing". Lonmin's Mokwena agrees: "Immediately, yes."

At the meeting a plan is formulated that Lonmin will issue an ultimatum to the miners to return to work or be fired, and if that does not work the police will move in to break up the strike.

If they do not surrender their weapons, "then it is blood", says Mbombo. She adds: "Emotions are very high ... I do not want a situation where 20 people will be dead. This is not what we are here for: what we are here for is to maintain peace and make sure there is peace between us, the people and the company."

Mokwena agrees and tells her: "The two plans go together".

Later, Mokwena compliments the police chief on the force's resources, saying: "I must tell you, the ones that impress me [are] these snipers."

Mbombo then assures Lonmin's head of security, Sinclair, that she can provide him with a water cannon.

There had already been a number of violent incidents at the mine in which strikers, police and security personnel had been killed. On the morning of 16 August, ambulances were put on standby by Lonmin and attempts were made by the police to order mortuary vans.

The police waited until the miners had amassed at the rocky hillside that had become their base before rolling out razor wire and opening fire. Evidence shows the water cannons were used just seven seconds before live ammunition was fired.

The meeting on 14 August arose after a concerted effort by Lonmin to get the police interaction that they wanted.

Related article: South African mining: A sector under pressure

Acts of intimidation and violence had been bubbling up even before an official strike was called and emails, telephone calls and a letter between top Lonmin executives show the company lobbying politicians and police chiefs to increase police pressure. Three days before the massacre, Albert Jamieson, the chief commercial officer of Lonmin, wrote to the minister for mineral resources, Susan Shabangu, and asked her to act more decisively and to "bring the full might of the state to bear on the situation".

In the letter, Jamieson also reminds the minister of the importance of Lonmin to the South African economy, and the pressures on the mining industry, writing: "I have spoken to the CEOs of Implats and Anglo [two other platinum mines] and we are all concerned about the prognosis for [platinum] miners in the [North West] province and the consequences for the industry, province and the country if the various organs of the states are unable to bring these repeat situations under control."

The mining sector is important to the South African economy. In 2012 it brought in $21bn, or 5.5% of GDP and 38% of all South African exports.

The day before the massacre, Cyril Ramaphosa, an ANC stalwart and at the time a non-executive director of Lonmin, called Shabangu. In an email he told his Lonmin colleagues what he said. "I called her and told her silence and inaction about what is happening at Lonmin was bad for her and the government."

The message got through. Ramaphosa later noted that Shabangu "is going into cabinet and will brief the president as well and get the minister of police Nathi Mthethwa to act in a more pointed way". In a statement to the commission of inquiry dated 30 May 2013, Ramaphosa said his engagement with government officials served to inform them of the gravity of the situation in Marikana.

"Lonmin management took the view that this was not simply an industrial dispute and that Lonmin needs the [police] to restore and maintain law and order and prevent further loss of life," he said. "Lonmin was anxious that government be informed of the seriousness of the situation."

Ramaphosa has since left Lonmin and become deputy president of the ANC. Political analyst Adam Habib points to the importance of his role in the affair. "Cyril Ramaphosa's emails don't demonstrate he's responsible for the massacre but they do suggest Lonmin had used his office to get access to ministers and security officials in a way that would not otherwise have been possible," he said.

Between the sending of Jamieson's letter on 13 August and the follow-up emails and lobbying two days later, the number of police on the Marikana site more than tripled.

Reports of violence and intimidation had been coming in to Lonmin security in the weeks before the massacre. In the week leading up to it, two police officers and two security guards were killed. Six miners were also killed, four of them shot by the police.

In public statements, Lonmin announced it had handed control and responsibility over to the police. On the day of the massacre, the chairman of Lonmin sent out a statement saying: "The South African Police Service have been in charge of public order and safety on the ground".

However, Lonmin had more than 500 contracted security officials working for them. Police officer Charl Annandale told the Farlam commission - the inquiry set up to investigate the massacre - that during the strike, the police "relied on their [Lonmin] feedback ... they had literally hundreds of security officers spread over their site that gave us valuable feedback".

In earlier days, informants among the striking miners had fed back information to Sinclair, the company's head of security, according to written statements to the commission.

Related article: Voices from the front line: Victims of the Marikana massacre speak out

Lonmin supplied CCTV, helicopters, jail cells and ambulances to the police operation. Lonmin staff also had access to police radios and logged information received on them. A photograph from the police command centre at the mine centre shows a plan for 16 August detailing the deployment of Lonmin security agents. The plan also notes the staff's arsenal, which includes 9mm pistols, LM5 assault rifles and shotguns.

The Farlam commission has heard from several parties arguing that they called on Lonmin to negotiate with their employees, including the head of the South African police, Riah Phiyega, and the bishop of Pretoria, Johannes Seoka.

However, the situation was complicated. Infighting between rival unions has proved a serious issue in the mining sector, and growing disillusionment with the NUM led to one of Lonmin's mineshafts, Karee, being left ununionised from mid-2011. It was in this vacuum that, in the month before the massacre, the company had negotiated directly with striking miners at Karee and agreed to an increase in allowances.

An internal memorandum from Lonmin officials shows that in July the company knew it was paying its rock drill operators less than other companies. The decision then to engage with workers directly, rather than through the unions, was approved by the executive committee.

Farmer, Lonmin's former chief executive, explained the effort to avoid any trouble, calling it "an attempt to pour oil on troubled water", but conceded it might have sent mixed messages to the workers.

When, in August, the miners attempted to talk directly to management again, the company's attitude had changed, with executives stating they would only negotiate through the official channels: the then-discredited NUM.

Five days before the massacre, the workers marched, armed only with placards and a few sticks, to the NUM offices. Statements from NUM leaders allege that Lonmin security warned the union leaders there that the miners intended them harm. NUM officials opened fire on the unarmed miners, wounding two and effectively breaking off relations for good.

Some attempts were made by Lonmin to open communications with the leader of the AMCU, Joseph Mathunjwa. The night before the massacre, he was sent by Lonmin and the police to talk to the miners and was told by the miners to return the next day to continue talks.. However, the following morning, Lonmin cut off all contact through Mathunjwa.

As well as the political and industry-wide pressures, Lonmin was facing significant financial pressure in the months before the massacre. Mid-year financial reports, produced a month before the incident, show that Lonmin's first-half profits had decreased nearly 90% compared to the same period the year before. Production and platinum prices were down, while the company's net debt had increased by 20% since the year before.

To compound the pressures, Lonmin's bank loan covenants were due to be tested in September. Passing that review relied on the company hitting certain profit margins.

"Revenue at the time was not generating the sufficient margin for us to be generating the cash needed, there was a risk that covenants could be breached. Of course when we had the strike for that protracted period of time, that pushed it over the tipping point," Farmer .

When asked if the financial pressures could have affected the way the strike was dealt with, the former chief executive said: "In any situation the financial considerations for the company are first and foremost, it's always a balancing act. Get everyone back and working as quick as possible: not only for financial reasons but also you need peace and harmony in the workforce."

When 3,000 Lonmin workers downed tools and went on strike it effectively brought the entire plant to a standstill, and the bank covenants were eventually breached.

Although he was ill at the time and therefore not present while the strike was going on, Farmer defends the actions of his former colleagues. "It would be normal for the police to call on the company and ask them to explain as a company what they think is happening ... but they would not have sat there and agreed a plan of action for the day with them, because we don't have that expertise. We're a mining company, we're not riot-control specialists," he said.

However, Andile Mngxitama, spokesman for Malema's Economic Freedom Fighters party, claimed: "The relationship between Lonmin and the [ANC] determined every action that happened in the buildup to the massacre. It confirms an unhealthy relationship between the mining companies and the state."

Lonmin declined to comment on the allegations, stating that it has undertaken not to comment publicly on issues under investigation before it has given evidence and representations to the Farlam commission.

A spokesperson said: "The company believes that this is vital to ensure the integrity of the inquiry, and to avoid pre-empting its processes or subsequent findings."

This investigation was published in the Observer newspaper.

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AMCU postpones vote on Amplats strike to 2014

Andre Janse van Vuuren

Bloomberg

26 November 2013

The dominant union at Anglo American Platinum Ltd.'s South African mines postponed to next year a decision on a possible strike over pay at the world's biggest producer of the metal.

The Association of Mineworkers and Construction Union will ask members to decide on a possible strike once they return in January from a two-week break, Jimmy Gama, its treasurer and spokesman, said today by phone. The AMCU got permission for a legal strike at the company, known as Amplats, two weeks ago after exhausting mediation procedures.

The AMCU usurped the National Union of Mineworkers in the past year as the biggest representative of employees at the world's three largest platinum producers -- Amplats, Impala Platinum Holdings Ltd and Lonmin Plc -- which mine most of their metal in South Africa. The union is demanding that basic monthly wages for the lowest-paid underground workers be more than doubles to 12,500 rand ($1,238). Amplats has offered 7 percent.

Mpumi Sithole, a spokeswoman for Johannesburg-based Amplats, wasn't immediately able to comment when contacted by phone. The AMCU had considered calling a strike vote on Nov. 30 or Dec. 1, but was unable to arrange a venue, Gama said.

Amplats erased earlier gains of as much as 0.9 percent in Johannesburg trading after the union's comments, falling 1.7 percent to 384.39 rand by 12:29 p.m. Platinum for immediate delivery was little changed at $1,384.46 an ounce after rising as much as 0.4 percent.

South Africa's Commission for Conciliation, Mediation and Arbitration on Nov. 13 gave the AMCU the right to call a strike at Amplats without its members risking dismissal.
Impala Platinum

Impala Platinum will meet with the AMCU on Dec. 12 in the latest effort to reach a wage settlement, Johan Theron, a spokesman for the company, said today by phone. The AMCU lowered its wage demand from the company by 31 percent to 8,668 rand on Nov. 12. The producer that day revised its offer for the lowest- paid below-surface workers to increases of 8.5 percent for the first year of a three-year deal. They currently earn 5,500 rand.

"The meeting is a last-ditch attempt to get a settlement before Christmas," Theron said. Workers would be entitled to salary increase payments backdated to July when the previous wage arrangement lapsed, he said. "If we can't get an agreement before Christmas, we won't be able to make those payments."

Impala's operations close on Dec. 20 and re-open on Jan. 5, Theron said.

The AMCU and Lonmin will meet for mediation by the CCMA on Dec. 10, Gama said.

NUM members plan today to march to the offices of Northam Platinum Ltd., a smaller producer, as a work stoppage over pay enters a fourth week. The NUM has been striking since Nov. 3 and has rejected wage increase offers of between 8 percent and 9 percent.

--Editors: John Viljoen, Ana Monteiro

To contact the reporter on this story: Andre Janse van Vuuren in Johannesburg at ajansevanvuu@bloomberg.net

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Anglo Platinum unionized miners postpone vote on strike until 2014

Cecilia Jamasmie

Mining.com

26 November 2013

The Association of Mineworkers and Construction Union (AMCU), the main coalition at Anglo American Platinum's South African mines, has decided to postpone a decision on a possible strike over pay at the world's biggest producer of the metal.

The AMCU, which is demanding higher wages for its platinum miners, obtained permission for a legal strike at the company two weeks ago after exhausting mediation procedures, Bloomberg reports.

The company, which supplies 40% of the world's platinum demand, has been taking steps towards consolidating five of its South African mines with nine shaft systems into three operating mines and reduce annual production by 350,000 ounces.

According to the firm, known as Amplats, those operations are not money-makers any longer, mainly due to mounting electricity and labour costs, as well as weaker prices. South Africa's Chamber of Mines estimates that at least half of the country's gold and platinum mines are still losing money or barely breaking even.

"The company is under tremendous economic pressure," Chief Executive Officer, Chris Griffith, warned in September. "Strikes and work stoppages will result in further losses that will hamper plans for future sustainability and further threaten the future of our 45,000 employees."

Earlier this year, Amplats lost almost 4,000 ounces of platinum production in only one day due a 24-hour strike.

But job cuts are a delicate subject in South Africa, where the unemployment rate is more than 25% and violent antagonism between main the mining industry's labour unions has killed dozens of people over the past 18 months.

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AMCU gets green light to strike over wages at Amplats

Reuters

13 November 2013

JOHANNESBURG - South Africa's AMCU union has been granted permission from the government mediator to strike over wages at Anglo American Platinum, a union spokesman said on Wednesday.

Spokesman Jimmy Gama told Reuters the Association on Mineworkers and Construction Union (AMCU) was not immediately calling the strike, which could cripple production at the world's largest producer of the precious metal.

"We are still going to consult with our members," said Gama after a government mediator issued the union with a "certificate of non-resolution", allowing it to call a legal strike.

AMCU, now the dominant union in the platinum sector with members representing around 70 percent of the industry's miners, is also preparing for possible strikes against other top producers Impala Platinum and Lonmin.

At Implats, AMCU already has permission to push ahead with a strike but Gama said the union was still in talks with the world's number two producer.

Separately, security personnel at Amplats' Mogalakwena mine dispersed protesting community members on Wednesday who were destroying mine property, the company said.

The demonstrators were demanding the company, a unit of Anglo American, give them permanent employment.

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AMCU cuts wage increase demand 31% at Implats

Andre Janse van Vuuren

Bloomberg

13 November 2013

(Bloomberg) - The largest labor union at Impala Platinum Holdings Ltd. cut its wage-increase demand by 31 percent as the parties worked toward avoiding a possible strike, the world's second-largest producer of the metal said.

The Association of Mineworkers and Construction Union lowered its pay-raise request for underground employees to 8,668 rand ($836) a month excluding benefits from 12,500 rand, Johan Theron, a company spokesman, said today. Impala has increased the offer to the lowest-paid below-surface miners by 0.5 percentage point to 8.5 percent for the first year of the three- year deal, Theron said. They currently earn 5,500 rand.

"We are closer, but still far from one another," Theron said in an-emailed response to questions.

The AMCU usurped the National Union of Mineworkers in the past year as the biggest representative of employees at the world's three largest platinum producers, which mine most of their metal in South Africa. The companies' profit margins declined after prices fell and costs, including wages, increased at a faster rate than the pace of inflation, which was 6 percent in September.

"The parties undertook to consult with their principals and meet again," Theron said.

Impala fell for a second day, losing 2.7 percent to 130.88 rand by 1:42 p.m. in Johannesburg, giving the company a market value of 82.7 billion rand.
Amplats, Northam

AMCU President Joseph Mathunjwa confirmed that Impala increased its offer when contacted by phone today. He didn't comment on the union's reduced demands.

The AMCU's members on Oct. 28 voted to strike if the wage impasse wasn't resolved, without setting a date.

The Commission for Conciliation, Mediation and Arbitration will today facilitate talks between the AMCU and Anglo American Platinum Ltd., the world's largest producer of the metal. The union earlier rejected an offer by Amplats, as the Johannesburg- based company is known, to raise pay by 7 percent.

Security staff at Amplats's Mogalakwena mine in the northern Limpopo province today broke up a group of protesters who were demanding jobs and destroying mine property, the company said in an e-mailed statement.

"Our security personnel had to fire warning shots using non-lethal ammunition to disperse the crowd," it said. "The company has engaged the South African Police Service to try and bring calm to the area."
No Interruption

Operations at Mogalakwena weren't interrupted, Amplats spokeswoman Mpumi Sithole said by phone.

Northam Platinum Ltd., operator of the world's deepest platinum mine, and the National Union of Mineworkers will attend a meeting called by the CCMA on Nov. 15, Ecliff Tantsi, the NUM's chief negotiator at Northam, said by phone.

The union called a wage strike on Nov. 3 and rejected a revised offer to increase pay by as much as 9 percent on Nov. 7.

"The current offer is the maximum the company can afford," Northam said in a statement today. "The longer the mine stands, the less affordable the offer becomes."

--Editors: Ana Monteiro, Alex Devine, Tony Barrett

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Community members protest at Amplats mine in South Africa

Reuters

13 November 2013

JOHANNESBURG - Security personnel at Anglo American Platinum (Amplats)'s Mogalakwena mine in South Africa on Wednesday dispersed protesting community members who were destroying mine property, the company said.

The demonstrators were demanding that the company, the world's top platinum producer, give them permanent employment.

Amplats spokeswoman Mpumi Sithole told Reuters operations at the mine had not been affected by the protest and the company had called in the police to help restore order.

The incident came days after Amplats workers at another mine, Dishaba, staged an underground sit-in to protest the suspension of a union leader.

Sithole said five trucks had been damaged by the protesters at the Mogalakwena mine.

"Our security personnel had to fire warning shots using non-lethal ammunition to disperse the crowd," she said.

Police said no injuries were reported.

"We're monitoring the situation, patrolling the area," provincial police spokeswoman Ronel Otto said.

Mogalakwena, located in South Africa's northern Limpopo province, is an open pit mine.

(Reporting by Olivia Kumwenda-Mtambo and Xola Potelwa; Editing by Pascal Fletcher)

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Amplats sit-in resolved, says miner

SAPA

11 November 2013

AN UNDERGROUND sit-in at Anglo American Platinum's (Amplats's) Dishaba mine in Limpopo has been resolved, the company said on Monday.

"All employees were brought safely to the surface on Sunday night. No production has been lost as this was a ‘make safe' shift following a DMR (Department of Mineral Resources) section 54 notice served on the mine," said spokeswoman Mpumi Sithole in a statement.

About 2,300 workers staged a sit-in on Saturday, demanding that the suspension of an Association of Mineworkers and Construction Union (Amcu) shop steward be lifted.

"The (Amcu) shop steward was suspended pending an inquiry for breach of safety regulations, which is against the company's behavioural procedure and in contravention of our zero harm objective.

She said Amplats's management and the union leadership engaged throughout the weekend to resolve the situation and ensure the safe evacuation of employees.

"The company encourages employees to raise concerns through relevant channels available, and to refrain from participating in illegal activities," said CEO Chris Griffith.

"We will not negotiate with employees engaged in illegal activity, especially behaviour and activity that endangers the lives of their fellow workers. Strong action will be taken against those who instigate this type of behaviour and activity."

Workers would return to work for night shift on Monday.

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Limpopo community, Amplats in bid to resolve impasse

SABC

7 November 2013

Community representatives of Armoede and Anglo Platinum Mine management outside Mokopane in Limpopo are holding a meeting aimed at resolving a stalemate between them.

This after about 200 community members staged a sit-in at the entrance of one of the shafts at the mine. Community members are accusing the mine of not employing local people.

Mining operations have now resumed after they were temporarily suspended on Thursday morning. The community was moved from parts of Mothlothlo in 2007.

According to them they were promised that the mine will employ 30 % of the local people. They are also accusing the mine of not developing their village, despite that they make millions of rands on the land of the community.

The community members are still gathered at the mine waiting for the outcome of a meeting currently underway.

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South African ex-union official shot dead in Marikana

Cecilia Jamasmie

Mining.com

6 November 2013

A former National Union of Mineworkers (NUM) shop steward has died in hospital after he was shot seven times at Lonmin's (LON:LMI) Marikana mine in Rustenburg on Sunday evening, the group said in a statement.

The man, ambushed outside his home in the mining town of Mooinooi, became the fourth person with ties to the NUM murdered in the platinum belt region in the past three months. The crimes are believed to be linked to ongoing rivalry between NUM and the Association of Mineworkers and Construction Union (Amcu).

"We are asking ourselves how long blood is going to have to flow in Marikana," NUM Rustenburg Regional Coordinator, Sithethi Mxasi, said in the statement.

Lonmin has been the focus of various violent incidents involving mine workers since 34 were shot and killed by police during a strike in August 2012.

Two months ago, a commission of inquiry leading a formal investigation on the deadly incident found police falsified and withheld documents related to the tragic event, misleading prosecutors with false accounts of events.

So far not a single police officer has been arrested in connection with the massacre or the recent crimes.

Mining in South Africa accounts for 6% of the nations' gross domestic product. The sector has recently become a symbol of the economic, social and political differences that continue to characterize the country.

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AngloGold to use reef-boring technology to halt ‘terminal decline'

Kevin Crowley

Bloomberg

7 November 2013

AngloGold Ashanti Ltd. will begin extracting gold using reef-boring technology in the first quarter of 2014 as the third-biggest producer of the metal seeks to halt a "terminal decline" of the industry in South Africa.

AngloGold aims to derive 10 percent to 20 percent of its South African gold using the technique within the next five years, Chief Executive Officer Srinivasan Venkatakrishnan said in a phone interview today. The Johannesburg-based company has produced 35 kilograms of gold using the new machines in testing at its TauTona mine, he said.

"This is a game changer, or a paradigm shift," said Venkatakrishnan, 48, who became CEO in May. "If we do nothing, the gold industry is in terminal decline."

After more than a century as the world's biggest gold producer, South Africa has now slumped to sixth position. Production fell by a third to 167,236 kilograms in the five years to 2012, according to the Chamber of Mines, the industry lobby group. China, Australia, the U.S., Russia and Peru have all overtaken the country.

The boring machines, which AngloGold has developed with its suppliers, are able to remove just the gold-bearing ore from the reef, replacing it with cement and chemicals that stabilize the mining structure. That means the company will have to treat less rock and can operate 24 hours a day, Venkatakrishnan said.

"This opens up areas that we cannot otherwise mine," he said. "It also opens up areas which we have left behind for infrastructure support."

Profit Swing

AngloGold rose the most in two weeks in Johannesburg trading after the company returned to profit in the third quarter as costs dropped.

Adjusted headline earnings, which exclude one-time items, were $576 million, compared with a loss of $135 million in the previous quarter, AngloGold said in a statement. The stock rose as much as 7.2 percent, the biggest intraday gain since Oct. 22.

The company, with 21 operations in 10 countries, is cutting jobs, spending and exploration and slowing production at higher- cost mines as it responds to a 22 percent decline in the gold price this year. AngloGold reduced all-in sustaining costs 11 percent to $1,155 an ounce. Gold rose 0.4 percent to $1,317.45 an ounce today.

"People are starting to realize that this company has come $300 down the cost curve on an all-in basis," Richard Hart, a Johannesburg-based analyst at Macquarie First South Securities Ltd., said in a telephone interview. Gold analysts in South Africa compare companies' quarterly results sequentially.

Shock Waves

AngloGold was 6.4 percent higher at 158.57 rand at 4:26 p.m. in Johannesburg, valuing the company at about 64 billion rand ($6.3 billion).

The cost-cutting efforts "will help us ride any shock waves we see as far as the gold price is concerned," Venkatakrishnan said on a call with reporters. "If the speculation that the gold boom is over is wrong, and the gold price were to surprise us on the upside, we will cream the extra cash flow for our shareholders."

AngloGold suspended its dividend in August following the plunge in the gold price. The company will be in a "much stronger position" to resume the distribution in February, when the board meets to decide on the payment, Venkatakrishnan said.

In September, AngloGold said it had started cheaper output from operations in the Democratic Republic of Congo and Australia earlier than planned. In the same month, it settled wage increases that ended a 48-hour strike in South Africa, where it produced 32 percent of its gold in the third quarter.

AngloGold is currently considering three offers for its Navachab mine in Namibia, he said. The company won't dump assets "just to tick a box," said the CEO, who was appointed after Mark Cutifani left to run Anglo American Plc.

--With assistance from Ana Monteiro in Johannesburg. Editors: Ana Monteiro, Alex Devine

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South African lawmakers postpone changes to mining, oil ruling

Cecilia Jamasmie

Mining.com

7 November 2013

South African lawmakers postpone changes to mining, oil ruling Parliament to sleep on proposed reforms.

South Africa's Parliament decided to put on hold proposed changes to the current mining and oil laws aimed to guarantee the country obtains more benefits from its riches, Industrial Minerals reports (subs. required).

According to legislators, the bill -which also aims to promote employment by encouraging greater manufacturing of raw materials- needs "further refinement" and better timing.

Mining companies and legal experts have criticized extensively some of the bill clauses, which they see affecting their businesses negatively. They have also say the new law would give the mines minister too much regulatory discretion, disregarding the constitutional provisions on property rights.

Among other potential changes, the bill grants broad discretion to the minister to decide the levels of minerals that must be set aside for beneficiation and the preferential pricing regime under which beneficiation can take place. It also lets the minister limit the export of certain minerals that qualifies as "strategic."

South Africa's two main mining sectors, platinum and gold, have had a hard year due to spiralling costs, weaker commodity prices and major strikes. On top of that, they have been dealing with rising electricity costs, deepening mine shafts, and sluggish productivity, all of which threaten the commercial viability of several mines.

Additionally, the country's mining industry has largely missed out on the recent resources boom and is still troubled by the shooting of 34 miners at Lomin's Marikana platinum mine.

Modifications to the 2002 Mineral and Petroleum Resources Development Act will be revisited next year.