David Sipunzi’s election to the top job of general secretary in the National Union of Mineworkers (NUM) was as low key as the man himself. He scraped in by nine votes against a man who had held the post for 10 years, Frans Baleni. Apparently, many in NUM felt the gentlemanly Baleni may have been too gentlemanly in dealing with the mining bosses.
The soft-spoken Sipunzi, a 54-year-old father of four from the small town of Willowvale, in the Eastern Cape, is a former underground miner. He was one of the first to join NUM when it formed in 1985. He spent decades as a union organizer, latterly in the Free State, and is seen as a radical.
“Sipunzi looks a bit like a deer in the headlights following his unanticipated election over the weekend. He has been suddenly foisted into the national spotlight with a swirl of contentious issues around him,” wrote journalist Ranjeni Munusamy, in the Daily Maverick.
Thapelo Tselapedi, a University of Johannesburg academic and political commentator, says Sipunzi was not a well-known candidate and his victory was a surprise.
“It is still early days to say Sipunzi and the new leadership will change the fortunes of the trade union. But for the new leadership, the task ahead is the unity of the federation (Cosatu). This could be the starting point to turn around things in the Tripartite,” says Tselapedi.
The Tripartite Alliance, comprising Cosatu, the federation that NUM is a member of; the African National Congress and the South African Communist Party, has been unsettled by divisions.
The first job for the new big man in NUM was to rally the troops at Westonaria Sports Complex, near Krugersdorp, west of Johannesburg, in late June. The union said there was going to be 3,000; less than a 1,000 turned up in the region that pushed for Sipunzi’s election. A fitting debut for a low key man.
On this day, the question was how NUM is going to stop the exodus of members – 100,000 to other unions in 10 bruising years in the mines. The former undisputed champion of the union movement is in danger of being knocked out by the militant streetfighters of the Association of Mineworkers and Construction Union (Amcu).
Prompted by his small audience’s warm applause, a calm and resolute Sipunzi took to the podium. He preached unity and radical recruitment.
“This situation is sad; we are very scared of it… Losing members means losing money. A union is strong when it has its own money. Let’s not use the excuse that the mines are closing down. We must look elsewhere for new membership. We must recruit in the construction sector, but we are lazy,” he says.
It is a search and fight against indolence that could decide the future of the most powerful union in Africa’s biggest mining industry.

Can The Deer Stare Down The Headlights?

When you talk to Ben Magara, the fifth child in a family of nine children from rural Zimbabwe, you can’t help but think that the open and friendly person smiling at you may be just too nice to be taking on a tough and thankless job.
Magara takes up the role as CEO of the world’s third-largest platinum miner, Lonmin, on July 1, and a rocky road lies ahead.
Worker relations at Lonmin and across the South African platinum sector are a bubbling cauldron. On June 3, a National Union of Mineworkers (NUM) official working at Lonmin’s Western Platinum operation, 120km north west of Johannesburg was shot dead. It led to talk of a peacekeeping force for the mines, which would have been unthinkable just two years ago.
It is a sign of troubled times. There was mistrust even before the Marikana tragedy in August. Between August 11 and 16, clashes between police and striking workers led to the deaths of 44 miners. More than 70 people were injured and around 250 people were arrested.
A public inquiry into the deaths and the reasons why the strike had been so violent will continue this month. It will also ascertain why police, security guards and miners, who did not strike, were killed. The hearings are slow and findings may only emerge next year.
What seems clear from the inquiry, so far, is that a breakdown in NUM leadership and failure by unions to direct their members, may have contributed to the massacre. Government, police and mining companies are also likely to shoulder the blame.
Since August, the unpredictable South African mining industry has been plagued by wildcat strikes. At Lonmin, the majority of the unionized workforce belongs to the Associated Mineworkers and Construction Union (AMCU), around 70%, according to management. AMCU has been around for some time, but last year came to the fore as a rival to NUM, which is accused of being out of touch with its members. At the platinum sectors two other major employers, Impala Platinum and Anglo American Platinum (Amplats), AMCU members also make up the majority of unionized employees, leaving NUM on the back foot.
This has made South Africa’s platinum mines a political battleground as NUM struggles to regain its power base. There is much on the line for both unions and the ANC. To a degree, the platinum sector wage talks that will be held in July will be as much about the politics of the country as they will be about miners looking for wage increases.
In May, Lonmin caught  up on lost production after last year’s violence, but lost even more production as infighting between NUM and AMCU supporters led to strikes. The company’s share price has fallen 33% year-on-year on the London Stock Exchange, where the company has its main listing.
“We have to make sure the assets are working optimally. We will be rising from a low base and need to keep the cash flow running,” says Magara.
Forty-six-year-old Magara is just as imposing now as when he was elevated to CEO of Anglo Coal South Africa seven years ago. He rises at 4AM to go to the gym and appears to have lost none of his verve and enthusiasm.
We meet at the Melrose Arch hotel, in Johannesburg. Magara is keen to talk about his hopes for Lonmin and the South African mining industry.
Magara says that the mining industry has to work together in communities around mines. And referring to a long running area of contention between miners and companies, he says the industry cannot merely apologize for silicosis. The debilitating lung disease can cause premature deaths. It is caused by crystalline silica dust inhaled by miners with inadequate protection. Today, the protection has improved and many of those suffering from the disease contracted it years ago. South African mining companies have been shying away from paying decent compensation to miners who contracted the disease.
“We have to deal with it,” he says.
Magara, who has a mining engineering degree from the University of Zimbabwe, acknowledges he will have his work cut out at Lonmin. His last job was executive head of engineering and capital projects at Amplats. He clearly knows the platinum business; while his job at Amplats was an executive one, at Lonmin the buck will stop with him.
Heads of resources companies in the 21st century need broad skills, it is no longer just about getting the ounces out of the ground, it also requires political poise.
“Everyone wants to have skin in the game,” says Magara.
He is a good communicator and as the quote above suggests he gives the impression that he is unlikely to be an immoveable object when it comes to negotiations. He knows his ability to communicate is a key attribute. Asked why he was selected as the person for the Lonmin job, he says much of his work at Amplats involved community relations. He had to help the company secure mining licenses.
At Amplats’ Mogalakwena mine, near Polokwane, two communities had to be relocated, often an uneasy task. When Magara took up his position with the company, the people were refusing to move. He went to the communities each week, meeting with 17 sub-committees to discuss their grievances.
“In six months we had the licence,” he says.
It is Magara’s view that on occasions mining companies may be too quick to revert to the law.
“Actually, it is about building relationships. It’s about respect,” he says.
Magara has always been close to the ground and early to rise. Back home, in Bikita, Masvingo, he would rise at 4AM to tend vegetables with his siblings and father, before heading off to school. In those days, Magara dreamed of being a bus driver.
Now as head of Lonmin, Magara steers a company with a market capitalization of $1.97 billion, albeit carrying significant debt, where he has to unite the divided. Already, as part of the South African Chamber of Mines collective bargaining process for wage talks in the gold and coal sector, NUM has tabled a demand of 60% for entry-level workers, with the overall demand about a 15% increase. Taking into account that unions aim high in wage negotiations, even an agreement to a fraction of these demands could prove ruinous. Wages make up half of mining costs.
Magara knows what he has to do with the operations at Lonmin.
“It’s all about efficiency… Lonmin has an excellent resource base,” he says.
That is just one aspect of what might be called the Lonmin success equation. If Magara steers the Lonmin bus onto the clear highway, he will have to have all the parties with “skin in the game” on board. Before he can settle into the driver’s seat, he will have to pull off quite a feat; an entente with labor that should lead to increased productivity and efficiencies.
Given the country’s history, NUM’s loss of footing and rivalry with AMCU, the trauma mining communities have suffered in the last year, it is a job that could drive an angel to drink.
Magara, though, as an African with significant experience in South Africa and Zimbabwe, some believe, is better equipped to negotiate this rough tough job than most.

A Rough Tough Job

“It’s an ill wind that blows nobody any good,” runs the proverb and the accuracy of that callous observation can be seen in the current labor mayhem trashing South Africa’s platinum sector.
Through their actions, the illegally-striking workers are doing exactly what is needed to bring a positive correction to the fundamentals of the platinum business.
On the downside, they are likely to pay a heavy price in permanently lost jobs because of it. In fact, all South Africans will suffer because of the knock-on consequences to the nation such as the recent cut in the country’s sovereign credit rating. That hits Eskom’s ability to raise funds which affects every electricity consumer in terms of future higher power tariffs and possible future power shortages.
The platinum price collapsed from around $1,750 in March because it became clear the global slowdown combined with the previous expansion in South African supply meant there was a surplus of metal in the markets, which analysts estimated at up to 500,000oz.
Economics 101 lays out a simple solution: cut the supply and the price will recover—but the South African producers would not, or could not,
do so.
Would not—because all miners are optimists at heart and believe the good times will return sooner rather than later. Therefore they did not want to incur the costs of closing shafts only to re-open them in a year’s time while at the same time handing commercial benefits to competitors who did not cut back.
Could not—because the platinum miners are under extreme political pressure from government to preserve jobs and that pressure can be applied in a variety of unpleasant ways.
The strikers have now done management’s work for it. Estimates of the amount of platinum production that could be lost this year, so far, sit around 300,000oz.
Surprise, surprise—the platinum price has jumped more than 20% since the beginning of August from around $1,400/oz to around $1,725 in early October.
The platinum industry’s marginal projects—some of which should probably never have been started in the first place because they are only viable at sky-high prices—are now being squeezed out of business.
That’s likely to be permanent. Labor accounts for around 50% of total cash operating costs so steep hikes in wages have a huge impact on the financial viability of the mines.
What’s more, foreign investors—who put up the money previously for all the new platinum projects—are seriously unimpressed.
“The government needs to take control of the situation and solidify practice and protocol with regard to wage negotiations before the nation’s mining sector becomes uninvestable,” says Fairfax Securities analyst John Meyer.
Impala Platinum marketing executive Derek Engelbrecht recently stated, “The days of South Africa as a five million ounce platinum producer are long gone. The country could settle at output of between 4.25 million oz and 4.5 million oz. The challenges being thrown at the industry make the attainment of 5 million oz very, very difficult.”
Remember—this was the sector of South Africa’s mining industry with the best growth prospects. Not only has that growth been, at best, considerably delayed but there will be a heavy price in lost jobs from the present work force.
Estimates on the jobs that could be lost range from 10,000 to 30,000. That results from a trend that has been obvious on the gold mines for the past 20 years. Time and time again, the unions have pushed for, and received, annual pay increases running well above ruling domestic inflation rates and the mines have coped by cutting out the higher-cost production assets that were no longer viable.
The one ray of light, is the agreement just reached between Gold Fields and the National Union of Mineworkers (NUM) over the new operating model for the mechanized South Deep mine.
I find it significant that Gold Fields management, after exhausting normal negotiation procedures, took a hard line stance issuing a Section 189 notice putting all the jobs at this mine on the line.
Being a nice guy clearly does not work. In December, Kumba Iron Ore paid out R345,000 ($39,800), after tax, to each of more than 6,000 of its employees, in terms of a free five-year share incentive scheme.
As of early October production from Kumba’s Sishen mine was suspended after 300 workers went on strike and blocked access to the pit.

Unintended Consequences

The hard boiled trade unionist sat and wept before journalists as he told of his last attempt to save some of the 44 lives—including two police officers, lost in a violent and bloody week at one of South Africa’s biggest and most troubled platinum mines.
For a week in August more than 3,000 workers protested on top of Wonderkop Hill around two kilometers from the gates of Marikana Mine, in Rustenburg 122km north west of Johannesburg. Almost the entire workforce of 30,000 people downed tools in support of more pay for the rock drillers, who carry out the hardest and most dangerous work for the least pay.
The president of the Association of Mineworkers and Construction Union (AMCU), Joseph Mathunjwa, recalled the last few minutes before angry strikers rushed the police.
“Please leave this place; they are going to kill you… I kneeled there, I tried to plead with them… They said to me they think it’s safe to be on the mountain. ‘If we have to be killed let the police come and kill us… We want money that can keep our families going’ [they said],” Mathunjwa says.
Mineworkers in North West’s Lonmin Platinum mine began striking on August 10 for salary increases from an estimated R4,500 ($540) to R12,500 ($1,500). Many have blamed rivalry between AMCU and the biggest trade union, the National Union of Mineworkers (NUM), for the tension that led to the fatal shooting.
AMCU denies this. It says the union was asked to intervene on August 13 and was merely doing its job.
“I never thought that the history of the Sharpeville massacre would happen in 2012, in a democratic society,” said Mathunjwa.
AMCU voiced their frustrations with their organization being wrongfully charged as orchestrating the massacre. Mathunjwa argued that they were a recognized union in some sections at Lonmin and had a membership of 7,000.
“Why involve violence now?”
Eddie Majadibodu, the head of bargaining for the NUM, saw the shootings and how police dispersed strikers in the aftermath on the following day to prevent more violence.
“The NUM wants a full public inquiry to determine exactly what happened,” he says.
It is one of the few issues upon which both unions agree.
The ministry of police spokesperson, Zweli Mnisi, says the matter has been a brewing labor issue, employee versus employer. The police were called in to retain order as the constitution does not call for barbaric behavior, he said. Two police officers were killed on the first day that violence struck, he says that the workers were in possession of illegal arms are and dared the cops saying: “You dare us, we won’t move. If you want war, we’ll give you war.”
“From our side it’s not the duty of the police to be labor brokers,” he says.
Police confirmed that 44 people had died on the night of August 16 when police first used water cannon and then bullets to stop a rushing crowd.
“The [Independent Police Investigative Directorate] IPID, who police the police, are onsite to determine who fired the first shot,” he says.
Lonmin chairman, Roger Phillimore, said: “We are treating the developments around police operations this afternoon [August 17] with the utmost seriousness. The South African Police Service (SAPS) have been in charge of public order and safety on the ground since the violence between competing labor factions erupted over the weekend, claiming the lives of eight of our employees and two police officers. It goes without saying that we deeply regret the further loss of life in what is clearly a public order rather than labor relations associated matter.”
Workers at Marikana risked dismissal by ignoring an ultimatum from Lonmin, the world’s third largest platinum producer, to return to work by August 17. President Jacob Zuma cut short a regional SADC conference, held in Maputo, Mozambique, to return home so he could visit Marikana.
As the sun went down on the day after the killings a group of women gathered around Wonderkop Hill and wept for their lost men.
“You have stolen our husbands, you have stolen our brothers,” shouted one distraught woman at police.
Only an inquiry will tell us how this happened.

A Week Of Bloody Shame

Struggle songs pierced the air to the sound of marching feet. Protestors jabbed sticks and steel poles to the skies.
One of them was petrol attendant, Thabo Moloedi, who makes the 80km journey from Sasolburg to Johannesburg along the N1 every day. He says tolls will hit millions like him in the pocket.
“Let’s ban them all,” he says.
Roads are the artery of every country and in Africa they are like gold dust. South Africa has spent R20 billion ($2.6 billion) on 185km of spanking new highways that would be welcome from Harare to Cairo.
The problem is now the government wants the people to pay for them. That will mean motorists forking out R14.2 billion ($1.85 billion) day by day. Every time motorists drive up or down the N1, N3, N12 R21, near Johannesburg, from April 30, they will  have to pay 30c for every kilometre calculated by sensors in huge overhead gantries. Those who buy a so called e-tag will pay directly from their bank account —those who don’t will be sent a more expensive bill through the post. If you don’t play ball, you could be prosecuted and new laws are on the way to cover this.
The plan has led to months of grumbling and accusations that the car-driving class is being used as a cash cow. It has also sparked one of the biggest protests seen in democratic South Africa. The Gauteng province protest was one of 34 across the country, which called on more than two million union members. Tens of thousands marched in Johannesburg alone.
“Tolls are a big burden and are going to fuel inflation,” says Lesiba Seshoka, the national spokesperson for the National Union of Mineworkers—the most powerful union in the land.
“We are still a developing country yet government is subjecting us to pay tolls. Whose pockets are going to be filled with this money?” says Dikshi Patel, a 45-year-old worker in the airline industry.
“The government has put the cart before the horse on this issue. A reliable, affordable and safe transport system should be a priority. If you start with the e-tolling system without ensuring that people can move freely from one place to another, you are disadvantaging these people, says Zingiswa Losi, the second deputy president of Cosatu the country’s trade union federation.
The South African Road Agency Limited (Sanral) is building through borrowing on local capital markets. It claims that if roads were funded purely by tax, citizens would still be waiting for their smooth highways.  Sanral calls the e-tag a “user fee” and denies it is double taxation for those who already pay car tax and fuel levy. During his annual budget speech, in Cape Town, on February 22, Finance Minister, Pravin Gordhan, assigned R5.8 billion to Sanral to help pay for the roads. This money allowed Sanral to cut toll fees from 60c to 30c per kilometre for cars in a bid to silence the howl of outrage. It appears to have failed.
Gordhan defended the cost of the toll roads saying they will ease traffic congestion. “Users benefit through lower vehicle operating costs, time savings and improved safety,” he says.
South Africans will also have to dig deeper to pay an increase in the general fuel levy on petrol and diesel, which will rise by 20c a liter on April 4. The money will go to pay for the new highways and motorists are not happy about that either.

Tag: National Union of Mineworkers

FORBES AFRICA SOCIAL MEDIA

Can The Deer Stare Down The Headlights?

A Rough Tough Job

Unintended Consequences

A Week Of Bloody Shame

The Road To Penury