South Africa: Lessons of the platinum miners' strike

The longest strike in South Africa’s history has ended. For nearly five long months, platinum miners affiliated to the Association of Mineworkers and Construction Union (AMCU) held out against the arrogance and intransigence of the platinum mine bosses. On Thursday the business press  broke  the news that an “in principle agreement” had been reached between the platinum mines and the union. The markets and the national  currency made strong gains in response. On the same day the workers indicated at mass rallies in Rustenburg that they would accept the latest offer of the mining houses. The companies and the union are expected to sign the agreement soon.

The reported  agreement means that the wages for the lowest categories of wages will rise by R1000 per month for the next 3-5 years. This is up from the R800 offer the bosses made three months ago. This means that at the end of the 5 year period, the workers will receive a salary of R10,000 per month. The workers originally demanded a basic salary pf R12,500 per month effective immediately.

Although many of the demands of the workers were not fully achieved, the result of the strike is a major concession on the part of the bosses and confirms the strength of the workers. It exposes the weakness of the bosses who had bet everything on crushing the strike and the organisation of the workers. Obviously they failed in this, and the workers emerged undefeated.

From the start there was a campaign of lies directed against them from the bosses, the media, the politicians and shamefully from other union leaders. Primarily this was aimed to paint the struggle of the workers black, to ostracise them and to paint their struggle as one posing “unreasonable” demands, etc.

All kinds of attempts were used to end the strike. There were endless negotiations between the union and the bosses. Then there was mediation from the CCMA, a statutory body set up to facilitate labour negotiations. When that failed the deputy president got involved. This was followed by the unprecedented intervention of a labour court judge who offered to mediate the dispute.  When she failed, it  would later be followed by the intervention of the new Minister of the Department Of Mineral Resources.

While the bosses and the state were using talks try to end the strike, they were also using brute force and intimidation. Lonmin, which through collusion  with the state, was responsible for the massacre of 34 miners on 16 August 2012, sent out text messages threatening striking workers with “retrenchments” if they did not return to work on 16 May. This campaign was backed by the state who sent in a massive police force, backed up by soldiers, to Rustenburg and Marikana ahead of the deadline. The reason was not, as alleged by the media, to provide safety. Where was the safety in 2012 when they murdered the miners? No! The aim was obvious: to intimidate the workers and frighten them back to work. But it failed. The workers, instead of going to work, organised themselves and held marches and a mass rally in defiance! It was after this mass show of force that the new administration of the government and the mining bosses returned to the negotiations again in earnest.

Lessons

The will of the miners were extraordinary! To hold out for nearly 21 weeks was a great feat. However, we must clearly  state that there were a lot of mistakes made in the process. A strike must be carefully planned and conducted. The union did not set up a strike fund beforehand. This led to the situation that workers had to sell their belongings and go into debt to sustain themselves and their families. This also led to the situation that workers were reliant on NGOs and the Social Security Agency for food parcels  and bare essentials.

Also there were not regular mass rallies  held throughout the duration of the strike. These rallies  should be the norm during a strike, not the exception. It is at mass gatherings where workers feel that they belong to a collective, where they can show solidarity, meet and discuss the way forward.

But the biggest lesson was that the strike was not spread to other unions and to others sectors of the economy. Had this been done, the strike could have been over sooner. At the same time it must be mentioned that solidarity was expressed by a union such as NUMSA, the biggest in the country. Unfortunately, this did not translate into action. A united mass movement and show of force by the entire working class is the best way to win concessions from the capitalists and the quickest way to end a strike.

This strike was one of the most significant events in South Africa’s  working class history. The greatest element, however, was not its duration or the courage of the miners. There was something more fundamental about it. It challenged the very foundations of the mining industry and of South African capitalism. The demand for R12,500 (originating from the massacre two years ago)  was double the amount that the lowest paid worker receives. It was a courageous  attempt by the miners to break the 130-year old legacy of poverty wages.

In the end they did not win the R12,500 that they had demanded. But the merit of the strike was that it bluntly posed the question of the exploitation of the miners and of workers in general. However, in spite of all this, in the long run, the strike could have ramifications which will affect the entire working class and will need all unions to react accordingly.

The first is job losses (which the bosses have hinted at). The second is a possible amendment to the labour laws. The new minister of Mineral Resources has indicated that he may ask for an amendment to the law which will give him a “deadlock-breaking mechanism”. Such a development would be a big step back for the entire working class movement.

Below is an article written before the strike ended, which explains the developments and root causes of the strike. Although the strike did not end the way we explained below, nevertheless, the article hold all its relevance.

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The strike  by 70-80,000 mine workers affiliated to the Association of Mineworkers and Construction Union (AMCU) in the platinum sector has now entered  its fifth straight  month, making it by far the longest strike in South African history. It has also halted  40 percent of global platinum-mining  production in a country which holds 80 percent of all platinum reserves. Together with Russia, South Africa holds the reserves of over 90 percent of platinum group metals which includes palladium.

AMCU downed tools on 23 January after wage-negotiations with  the world’s three biggest platinum producers Anglo American Platinum (AMPLATS), Lonmin and Impala Platinum (IMPLATS) collapsed. AMCU is demanding  a basic monthly  salary of R12,500. The strike has exposed many of the deep-seated contradictions and fault-lines of South African capitalism which sits on top of some of the biggest potential mineral wealth in the world, yet the workers who produce this wealth can barely keep their heads above water.

A dire situation

The economy of Rustenburg, a city of about 500,000 people, has virtually collapsed. Mining-related industries account for about half of the jobs here and about 60 percent of its  economy. Figures released recently by Stats SA showed that mining production has seen its  steepest fall in 47 years. Over the last quarter, mining GDP has fallen by 24 percent and the economy has contracted for the first time since the 2009 recession.

One of the NGOs, Gift of the Givers, which usually conduct relief-work in war-zones and disaster-struck  areas like earthquakes, describes the situation in the Rustenburg area:

“Aid is sporadic, minimal and dependent on the generosity of well wishers sympathetic to the plight of the starving mine workers families. The need is huge, the hunger palpable, the situation desperate as 80 000 families have been affected by the crippling 16 week labour unrest. Many have sold most of their possessions including appliances and other valuables. There is no income, no means to pay school fees, to buy blankets, sanitary pads, baby milk powder or simple medication.”

In fact, due to the practice of using migrant labour (see below), means that many workers have two families – one in the Marikana area and another in the Eastern Cape province. This means that as many as 500,000 people are affected by the strike. Gift of the Givers has delivered food parcels to thousands of people in Marikana. Chairman, Dr Imtiaz Sooliman said there was an “overwhelming”  response to their call to for support for the families on the mines.

This campaign was attacked by some in the media who questioned why the miners need help when it is they who are on strike in the first place. The answer is simple: because the system is exploitative to begin with. That is what pushed the workers to demand a “living wage” of R12,500 in the first place.

Attempts to break the strike

All kinds of attempts  have been made to end the strike. The latest one  is by the new Minister of the Department of  Mineral Resources, Ngoako Ramatlodi who has set up an inter-governmental task team to “facilitate” talks between the union and the companies.

“The mandate of the technical team is to broaden the approach and explore all possibilities for a resolution to the problem. They will interrogate all the information, including the figures, provided by both parties and report back by the end of the day on what is possible,” the minister said.

Every day news comes out about “progress”, that the end of the strike is “in sight”, that the talks are at “a sensitive stage” and that “all partners are committed” to a “speedy resolution.” This is generally  followed by news that no agreement has been reached and that “talks are continuing.”

However, it now seems that even the new minister has run into a brick wall. After expressing great hope to end the strike, Minister Ramatlodi expressed exasperation on Saturday, saying he cannot deal with the situation any longer. He gave the parties until Monday, 9 June, to come up with a deal or he will pull out of the facilitation process.

“On Monday, all the parties will have a happy Monday or we will have a sad Monday if the parties decide not to walk the last mile. I am pulling out on Monday if they do not find each other. If they do not find each other, I wish them good luck and I wish South Africa good luck,” he said.

Before the interventions by the new minister, the talks was mediated by a judge of the labour court who urged the parties to return to the negotiating table for fresh talks. Before the intervention of the judge, the attempts to end the strike were mediated by the Commission for Conciliation Mediation and Arbitration, a statutory labour conflict resolution body. Before that, there were several rounds of negotiations between the union and the three companies.  But, in addition to these talks, the bosses have also tried to to intimidate the workers.

Earlier we described how Lonin tried to break the strike forcefully by sending text messages to its employees, giving them  an ultimatum to return or face “restructuring”, i.e. dismissals. This blatant  attempted to break the strike by force was helped  by the state which deployed a huge police force to Marikana which was backed up by the deployment of the army to a Rustenburg police base. The campaign was supplemented by the media which talked about the lack of  “affordability” of the wage demands and threats of shaft closures. This attempt failed to shake the resolve of the striking workers. The campaign was  defeated by the workers when they organised themselves spontaneously and held marches and mass assemblies on 16 May, the day that  the ultimatum expired. After this, Lonmin announced that it would temporarily stop its text-message campaign because the they “seem to cause some anxiety among the workers.” In plain language, the campaign had the opposite effect to what  Lonmin intended. Instead of breaking the strike, it galvanised the workers and brought  them onto the streets. If this attempt of Lonmin  had been successful, there is no doubt that it would have been copied by Anglo and Impala.

Bosses’ strategy

The central message from the bosses is clear: no concessions! This was confirmed by Anglo American CEO Mark Cutifidi in a speech in London. Addressing an event organised by the Melbourne Mining Club, he said:

“It’s the fight we had to have. I’m comfortable we’ll get there, but it does need us to stand our ground and be constructive and find a solution to work in the long term.” (Bloomberg, 05/06/2014)

This is the essence of the bosses’ strategy. They want to hold the line on pay increases and improvements of conditions, not for any ideological reasons, but because their capitalist system is in crisis. There is also a second reason: they fear that if they give in to the demands of the workers and double the salaries in the platinum sector, it will set a dangerous precedent. This is the reason for the hard- line stance of the capitalists who have clearly drawn a line in the sand and are refusing to budge.

Right from the beginning of the strike, the attitude of the mining bosses was one of arrogance and intransigence.  While AMCU has made several compromises on their sets of demands (a fact never reported in the media), including shifting its central demand of R12,500 to be implemented over four years, rather  than immediately, the platinum producers have barely moved at all.  In fact, they continuously make the same offer -  each time dressing it up differently.

AMCU president, Joseph Mathunjwa earlier accused the employers of negotiating in bad faith. For example, he accused the mining houses of withholding important information over wages and costs. He revealed that Anglo had used inflated employee numbers in making projections on affordability. The numbers of workers used by Anglo in its calculations was almost 5000 higher than the actual number, thereby inflating the wage-increase projections by as much as R500 million. It was later revealed that the company had included retrenched workers in its calculations.

Another example of the arrogance of the bosses was on full display right in the middle of the strike when the bosses announced that they have awarded  themselves astronomical pay packages. The real attitude of the bourgeois was revealed by Amplats CEO Chris Griffith. When Asked about  R17.6 million he took home he said: “Am I getting paid on a fair basis for what I’m having to deal with in this company? Must I run this company and deal with all this nonsense for nothing? I’m at work. I’m not on strike.”

His subsequent apology carries no water and was made to counter the public relations fallout.

In addition to all this, it is important to note that this strike plays out in the background to the Marikana massacre of 16 August 2012 when police shot dead 34 miners at Lonmin’s mine. Those events are burned into the collective consciousness of the workers. The demands at the time of the massacre are the same demands that the they are fighting for now. This is a big  factor which has  helped to sustain the strike for this length of time.

Exploitative system

Many of the workers in the North West province originate from poor rural areas in the Eastern Cape and return home once or twice a year. This system of recruitment is called the migrant labour system and it  has been in existence for over 100 years. Although it has undergone many changes, including using labour brokers and contract workers, in essence it is still in place. Recruitment is carried out by a company called The Employment Bureau of Africa (Teba)  which was set up by the Chamber of mines in 1902. It was only in 2005 that Teba broke links with the Chamber of Mines. Today it is a private company. But its role is still to recruit workers for the Chamber. Teba recruits 240,000 workers in South Africa with with the Eastern Cape being the the biggest at 35 percent.

South African mines have always relied on large amounts of unskilled labour. Low wages are the lifeblood of mining under capitalism and recruitment has always been one of the crucial pillars on which the migrant labour system rests. The peasant societies in the Eastern Cape act as a reserve pool of cheap labour for the accumulation of capital. This has resulted in an enormous influx of workers from the Eastern Cape to the North West province where workers used to live in single appalling single-sex hostels.

The results of reforms

Attempts to reform the migrant labour system have been disastrous. One of the ways to reform the system was to offer a “living-out allowance” to workers. Many workers opted to take this allowance of about R1800 per month to supplement their appalling wages. The consequence is that large communities of miners are now living in impoverished shanty towns around the mines, sharing toilets and taps with dozens of others. This has also meant that many workers have started second families, meaning that on average a single worker has to support 8 people in two provinces.

A second way was to reduce Teba’s main role as a central recruitment agency. Although this has meant that Teba’s influence has weakened over the years, it has merely opened the door to labour brokers who are now also supplying labour to the mines. But, contrary to the previous position, many of the workers sourced in this way do not work for the mines but for the labour broker. The result is these workers live a precarious existence with poor pay, no job security  with minimal training, dangerous working conditions and restrictions on joining a union. In short, workers employed via the labour brokers are worse off than those who are unionised.

Massive profits

A  new paper released last week by two research units at the University of Witwatersrand in Johannesburg and the University of Manchester in the United Kingdom shows that huge profits in the past decade were made by investors in the platinum companies, while workers benefited very little. The document called  “Demanding the Impossible? Platinum Mining Profits and Wage Demands in Context” says that between 1999 and 2009 the operating profit margins of the three big  platinum producers – Anglo American Platinum, Impala Platinum and Lonmin – were more than double those of other companies in the top 40 listed companies on the Johannesburg stock exchange in this period. It also states that the return on investment was over ten times the stock exchange’s average on several occasions. In 1999 platinum cost $350 an ounce. A decade later it was $27,100 an ounce.

As researchers Andrew Bowman and Gilad Isaacs commented on  the report:

“Platinum shareholders have done extremely well over the last 13 years in comparison to labour. Between 2000 and 2008 workers received only 29% of the profits produced by the platinum mines. This was half the average for the economy as a whole, in which workers got 51% of the profits (…) At Implats more was given to shareholders than was given to the whole workforce in wages: R47.7million versus R43.5million. At Amplats and Lonmin the numbers were much closer, but still fell in favour of shareholders.”

The report also refers to how the remuneration of the bosses take place:

“A substantial portion of executive remuneration also came through share options, which meant executives had a direct stake in short-term shareholder value maximisation.  Being multinational corporations, these profits also flowed overseas.

'It is clear that for the boom years these payouts were significantly above the average for the wider economy,' the paper said. Share prices also soared. “These trends show the prioritisation of shareholder value maximisation, which dictates that costs are minimised, especially labour costs.”

According to Stats SA, in the mining sector as a whole, the share of wages as a percentage of national income has fallen from 55 percent in 1997 to 38 percent in 2012. While this downward pressure on wages continues, prices of basic foodstuffs has doubled in the last five years.

The report, notes that a strike was inevitable:

“It is against this backdrop of super-profits, from which labour gained too little, that the strikers’ wage demands must be viewed.”

“The South African regulatory system allowed them [mining companies] to capture the lion’s share of the benefits, extracting enormous resource rents which were distributed to shareholders,” the report says.

Employers say the demand for a R12,500 “living wage” by the Association of Mineworkers and Construction Union (Amcu) on behalf of the strikers is not affordable in the current economic climate.

But a new  paper says huge profits in the past decade were made by investors while workers benefited little. If this had not occurred, workers could be earning the wage they are striking for.

“Although the R12,500 entry-level basic wage demand was double current levels, it was affordable in the context of the mines’ long-term profitability.”

“Mining companies are portraying themselves as cash-strapped, but this narrative was selective because it only looked at a narrow time frame when the global recession and work stoppages had hit the companies, and ignored long-term profitability.”

However it is here where the report falls short. The researchers proposed a resource rent tax, that would tax profits above 15% heavily and concludes:

“There is no reason why gains during a commodities boom should predominantly benefit mining executives and shareholders.”

Well, this is how capitalism works. The capitalists expropriates the surplus product created by the labour power of the workers and pay the workers a wage which they try to hold down as much as possible to maximise profits. Capitalists do not run the companies to create employment or to pay workers a decent wage. They run them for profit. It is utopian to expect the companies to behave otherwise.

The Wits report also criticises union inaction: “It was during this boom time that labour was best positioned to fight for meaningful wage increases, but for the most part NUM [the National Union of Mineworkers] adopted a compliant approach to relations with management.”

Hard lessons - the  1987 strike

The current strike has many similarities with the 1987 strike by the National Union of Mineworkers. The demands were very similar to the ones of the current strike, including abolishing the migrant labour system. The strike was at the time the longest and biggest strike in South Africa. When the NUM made little headway during the formal negotiations, it decided to ballot its members on whether to engage in strike action. The ballot of 210,000 mineworkers, held on August 2, 1987, indicated that 95% supported the strike. Thus, with the overwhelming support of its members, the NUM called for a general strike, beginning the following Sunday evening, August 9. On Monday August 10, the first official day of the industrial action, an estimated 340,000 people came out on strike, which represented more than 70% of all black coal and gold miners.

Fearing that the strike might drag on, mining companies tried hard to break it quickly with brute force (as they did with the massacre at Marikana in 2012) to compel strikers to return to work. While such tactics did encourage some to return to work, it is estimated that 250,000 miners stayed out for the duration of the strike. Although the NUM and the Chamber of MInes held a number of talks and attempted to negotiate a resolution to the dispute, the gulf between industry and labour remained too wide and the impasse persisted. The NUM leadership made the mistake of sending the workers home to their rural villages. The Chamber of Mines responded by retrenching up to 40,000 workers. Then, after three weeks of industrial action, Anglo American threatened to dismiss its entire striking workforce. This forced the NUM into submission. Faced with this real possibility, the NUM had little option but to concede to the will of industry and end the strike. Thoroughly defeated, miners returned to work on 30 August.

It is obvious that the platinum bosses are using the same tactics of 1987. This is a serious lesson that the AMCU leadership must take on board. The 1987 strike was a serious defeat because the NUM then, like today’s AMCU leadership, had many weaknesses and made some serious mistakes. Fighting the mining bosses involves careful planning and preparation. Union leaders must plan and organise the strike long before it is called. AMCU did not do this. As in 1987, the union did not call for a ban on overtime before the strike. This meant that the bosses had enormous stockpiles which helped them to hold out. In the current strike the bosses had an estimated 5 million ounces of above-ground platinum. This meant that the platinum mines had enough reserves for more than 6 weeks. A second mistake on both occasions was that a strike fund was not set up well before the strike. This has meant that workers are now reliant on NGOs for help. The third lesson is that there were very few mass rallies during the duration of the strike. Mass rallies should be the norm, not the exception because they allow workers to keep in touch with each other, discuss the issues, take decisions and show solidarity.

Can AMCU win the strike?

The answer is yes. It is clear that the strategy of the bosses is to sit out the strike and not to give in to the demands of the workers. Therefore, the only way forward is to spread the strike and call for solidarity from the ranks of other unions, including the COSATU unions. The fact that AMCU is not an affiliate of COSATU cannot be sued as an excuse. For instance, NUMSA, COSATU’s biggest union, has already stated that it is considering a solidarity strike with AMCU.

NUMSA general secretary Irvin Jim hit the nail on the head when he said  that the root cause of the strike in Marikana was the “capitalist imperialist ownership” of the mineral resources which is based on “super-exploitation of migrant labour.”  He said NUMSA holds the mining bosses responsible for the impact on the economy.

This is perfectly correct. But these words must be turned into action. A defeat for AMCU will be a defeat for the the entire working class! Although South African workers have an extraordinary ability to recover from defeats, a defeat by AMCU would mean that a large section of the working class will be seriously compromised in the next period. Last week, NUMSA announced a potential strike in the steel, engineering and metal sectors of about 220,000 workers for 1 July. If this strike takes place, it would have a far bigger impact than the platinum strike because of the importance of the sector, but also because it will bring out some of the heavy battalions of the working class.

However, there are still 3 weeks to go. In order for AMCU to win the strike it has to make the bold call for solidarity strike  action from NUMSA and the entire working class. Together with this call, the central demand should be to nationalise the mines. The South African mining bourgeoisie are amongst the most powerful capitalists in the world. They are ruthless and will not give in unless they feel that there is a real chance that they could lose everything. But in the last analysis, the mining industry is part of the entire capitalist system which is in a crisis beyond repair. We have seen how attempts to reform this system of exploitation on a capitalist basis has broken down with disastrous consequences. Ultimately, the only solution is to nationalise the commanding heights of the economy under  democratic workers’ control and management as part of the socialist transformation of society.