A Monday deadline set by the government was reached without progress and the talks collapsed. The two sides are far apart on the wage issue with the Association of Miners and Construction Union (AMCU) seeking $1,200 a month – double their current wage – while the companies are offering a 10% raise, reaching $1,200 by July 2017. Out of this increase, deductions would be taken for housing and other basic essentials.
Some 80,000 union-member workers are honoring the strike which affects AMCU members at Lonmin, Impala Platinum and Anglo American Platinum – holding 45% of the world’s platinum supply.
South African mining companies rank in the world’s top 40 and their earnings have been in the billions. This week, they were stung by a report that claimed they hadn’t done enough to share profits during the boom years before the economic recession in 2008.
In “Demanding the impossible? Platinum Mining Profits and Wage Demands in Context”, researchers Andrew Bowman and Gilad Isaacs, working out of South Africa’s Wits University, examined whether the companies can afford to pay miners a “living wage” or whether the companies are in a period of financial difficulty as they claim.
“Platinum shareholders have done extremely well over the last 14 years in comparison to labor,” they said in the report. “Poor living conditions in the platinum mines, anger over low wages and large pay differentials between workers and management have acted as a catalyst for increased labor militancy.”
Between 1999 and 2008 platinum prices rose from $350 to $2,100, with the companies’ operating profit margins doubling the Johannesburg Stock Exchange (JSE) top 40 average and tripling the median rate. The return on investment was up to 10 times higher than the rate of 15% that the ANC considered “fair” in a policy document.
According to the report, the companies prioritized shareholder profits at the cost of both labor and long-term investment strategies. After 2008, they said, results weren’t as impressive for the platinum producers yet they are still strong.
The study criticized the previous union for not seeking raises during a profitable period. The National Union of Miners during the boom time was best positioned to fight for meaningful wage increases, they wrote, “but for the most part it adopted a compliant approach to relations with management.”
Miners now represented by the AMCU were slapped with charges this week by the ruling African National Congress, of being lead by “white foreign nationals” trying to destabilize South Africa’s economy, along with the Economic Freedom Fighters of Julius Malema.