Painful And Costly Strike Ends With Glee And Hope

“Welcome back,” said the sign at the end of the strike. This bitter dispute ended with smiles and handshakes under Christmas lights at the mine gate.

On June 25, across the platinum belt near Rustenburg in the North West province of South Africa, 120 kilometers north of Johannesburg, around 70,000 miners went back to work. The Association of Mineworkers and Construction Union (Amcu) reached a wage settlement the day before with platinum producers Lonmin, Implats and Angloplats.

“It is our sincere hope that our companies, our industry, our employees and all stakeholders will never again have to endure the pain and suffering of this unprecedented strike period. None of us, nor the country as a whole, can afford repetition,” says Ben Magara, Lonmin CEO, after the union signed a three-year agreement.

At one of Lonmin’s mines in Marikana, hundreds of mineworkers walked in darkness to clock in. Their supervisors and bosses formed a guard of honor to welcome them back. But production was far away in the first weeks of the return. Miners were inducted and went through health checks before setting foot in the shafts.

“Previously, mining companies just put their workers back to work straight away. That’s not Lonmin, we are not here for the quick and short term solutions. We’re for a sustainable business with the interest of the person at heart,” says Mark Munroe, Lonmin’s mining division and safety head.

Lonmin says it could be six months before full production is reached.

Munroe says from the beginning of the strike, Lonmin invested in mine maintenance to protect the shafts from damage and keep ventilation working. Engineers have also been hard at work managing water underground.

“We shut down with the cognisance it will go on for a long while. In fact, we put extra mine support in place. We put plans in certain configurations so that we wouldn’t need so much maintenance and check-ins. All the water was stored,” says Munroe.

The separate agreements reached with each company are effective from July 1, 2013 for Amplats and Implats and Lonmin on October 1, and will run until June 2016. Employees with basic salaries less than $1,126 a month will receive a $94 increase over three years.

“This victory ushered a paradigm shift in the entire mining sector. This also shifts the media mindset that our demands were ridiculous,” says Amcu president, Joseph Mathunjwa, after signing the agreement.

Mathunjwa says they have established a task team that will look at worker share ownership. This means miners could own part of the mines they closed for five months.

Former Anglo American strategist, Clem Sunter, supports this.

Sunter says Kumba Iron Ore, a subsidiary of Anglo American, has an employee share ownership scheme which since December 2011 paid out gross dividends to employees of more than $56,000.

“The shares won’t stop strikes but they will reduce the odds that they will go on strike for a long time. It is a step towards a more inclusive economy,” he says.

“The worker shareholder scheme is a very good idea that needs to be encouraged because it could change their lives for the better. It will give workers a meaningful stake from the company revenue,” says Andrew Levy, a labor economist and consultant at Andrew Levy Employment.

Levy says if the workers wishes are granted, it will be prudent to familiarize them with economic literacy to understand the share price of their companies.

“Workers will think carefully about going on strike because they are directly benefitting in the economy,” he says.

The mine owners hope so.