Empty Buses Show Defiance Eclipses Hunger in Platinum Strike

May 23, 2014 2:09 pm ET

(Updates with talks to continue in fourth paragraph.)

May 23 (Bloomberg) -- An empty bus that’s supposed to be taking Lonmin Plc employees back to work rolled along the dusty main road in Marikana in the heart of South Africa’s platinum belt, where miners have been on strike for four months.

“You can see for yourself,” said Jandri van Rensburg, a 25-year-old platinum miner who was drinking beer outside Survivors Pub in the settlement on a sunny Friday afternoon. “Don’t believe what the mines are saying -- people don’t want to go back to work.”

The bus, green with about 30 seats and a Lonmin sign on the side, was one of three empty shuttles that a reporter from Bloomberg News saw on May 16 heading toward Lonmin’s Wonderkop mine, close to where 34 wage protesters were killed by police in 2012. Mediation talks between the companies and worker representatives in Johannesburg, set down for three days, have been extended into the weekend.

Van Rensburg’s defiance reflects anger and masks fear in the Rustenburg area of the North West province, where as many as 1.6 million people have been affected by the strike at operations owned by Lonmin, Anglo American Platinum Ltd. and Impala Platinum Holdings Ltd. Five people have been murdered this month, including four miners, while thousands of starving families rely on food aid.

The workers, who don’t get paid when on strike, have lost a third of their annual wages, meaning it would take at least three years to make back the money lost, even if they get the 12,500 rand ($1,200) they’re demanding. Producers have lost 19 billion rand in revenue, making this South Africa’s longest and costliest mine stoppage.

Retribution Fear

A 38-year-old Impala employee, walking along a paved road scarred by tire burning, said he is sad the strike has gone on for so long because it’s brought financial hardship and provoked killings. He asked not to be identified for fear of retribution.

“The level of intimidation is high so people wanting to come back to work sometimes walk to the shafts or use modes of transport other than the buses,” Lerato Molebatsi, a spokeswoman for Lonmin, said by phone yesterday.

More than 70,000 miners walked off the job on Jan. 23 in South Africa, which has the world’s biggest reserves of platinum, used to make jewelry and by automakers in pollution- control devices. They’re members of the Association of Mineworkers and Construction Union, which rose to become the largest labor group in platinum after the shootings in 2012.

Long Battle

It wants wages to be more than doubled to 12,500 rand a month within four years, including a 30 percent increase in the first year. The companies say that is unaffordable and are offering 10 percent. Inflation was 6.1 percent in April.

Joseph Mathunjwa, the AMCU’s president, has continually said that the union’s wage demands reflect the will of his members and that his organization is peaceful. He declined to comment when called yesterday.

“This is not a one-year negotiation, this is a 20-year battle,” said Itumeleng Sebokolwi, 30, outside the Impala mining hostel near Rustenburg where he lives. “We want to close the gap between the whites, Indians and blacks. That’s the problem we’re having.”

While incomes for black households have doubled in the 10 years through 2012, their annual earnings are the lowest for any race group in the country and are a sixth of that for whites, the nation’s latest census shows.

Apartheid System

The income disparity stems from apartheid, a system of institutionalized racial discrimination and white rule that reduced the black majority’s economic opportunities and gave Indians and mixed-race people preferential treatment over them. The system ended in 1994.

As about 30 fellow striking miners fresh from singing protest songs surrounded him, Sebokolwi became more animated, his lips curled with anger as he repeatedly stabbed the air with his finger.

“This is serious, man,” Sebokolwi said. “We’re dying. We are hungry now. We are taking the platinum from underground but we’re getting peanuts, my friend. The cost of food is too high, the price of everything is going up. We cannot afford to support our families.”

Average basic monthly mining pay of 6,000 rand in 2012 was almost double the mean entry-level wage in South Africa that year, the three platinum producers said on a joint website, citing data compiled by HSBC Securities SA (Pty) Ltd.

Shack Dwellings

Nevertheless, the mineworkers, many of whom live in corrugated-iron shacks, feel left behind in Africa’s most industrialized economy, 20 years after Nelson Mandela became the country’s first black president and helped end white-minority rule. For companies, this strike may mark the end of the cheap labor on which South Africa’s 147-year-old mining industry was built.

Anglo American Platinum, known as Amplats, Impala and Lonmin, all based in Johannesburg, will extend a judge-led mediation process with the AMCU into a fourth day tomorrow.

The companies, who say about half their shafts are currently unprofitable, have said restructuring is inevitable after the strike, with job losses probable.

“Over the last few years we’ve raised wages significantly above inflation and want do more,” Johan Theron, a spokesman for Impala, the world’s no. 2 producer, said by phone yesterday. “However, we must balance our willingness to do more with our ability to do so.”

CEO Bonus

Impala has declined 8.3 percent since Jan. 23 in Johannesburg trading, while Amplats has risen 10 percent and Lonmin is down 19 percent. The metal, which declined 1.2 percent to $1,473.62 an ounce by 6:51 p.m. in London, is up 1.3 percent in the period.

Oliver Thipe, 30, who works for Amplats’s Bathopele mine near Rustenburg in the North West province, is convinced the companies can afford AMCU’s demands.

“We have been on strike for four months and after four months the CEO gets like a 4 million-rand bonus,” he said after a gathering of about 40 AMCU members in a gravel car park outside the mine. “Where is that money coming from? They can afford it, they are just playing games.”

Amplats announced on May 16 that chief executive officer Chris Griffith and 11 colleagues would share a 25.3 million-rand bonus pool in the next three years if they meet targets. Griffith apologized for comments he made in a subsequent interview with Johannesburg-based newspaper Business Day.

‘This Nonsense’

“Must I run this company and deal with all this nonsense for nothing?” he said in the interview, referring to the strike.

At least a dozen miners approached by Bloomberg News declined to speak about their plight in and around Marikana. There has been intimidation, according to Van Rensburg, who said people wanting to go back to work were targeted by the community and not by the AMCU. The union says it is peaceful and denies intimidating or instigating violence.

Of the five people murdered, a Lonmin and Amplats worker were stabbed, a contractor was burnt to death and another man and woman were found with open wounds on their necks. While the police know the alleged killers, they haven’t yet found them to make arrests, North West province police spokesman Thulani Ngubane said.

Meanwhile, about 12,000 people have benefited from packs of corn, rice, beans and bread distributed by Gift of the Givers in the Rustenburg area, said Imtiaz Sooliman, chairman of the disaster-response group. The recipients, who queued for hours to receive parcels, are “desperate and insecure,” he said.

Medical Team

Gift of the Givers will distribute more food parcels tomorrow and station a 24-member medical team at Wonderkop stadium tomorrow, it said in an e-mailed statement today. Malnutrition and related illnesses are the primary concerns, it said. The group will move to mines in the neighboring Limpopo province on May 26, it said.

Miners and their families are “used to suffering” due to low pay, said Thipe, the Amplats worker, who has a wife and four-year-old child. “We’ve been struggling every day. We found a new union that’s trying to do something different.”

It would take the striking workers three years of a doubled monthly salary of 12,500 rand just to make back the money lost in the last four months, according to Mike Schussler, chief economist at Johannesburg-based Economists.co.za. If they get an increase of 10 percent, they’ll probably never make it back.

Van Rensburg, with a smooth shaved head, a polo shirt and baggy jeans, said he and other striking workers have their “eyes wide open” at the consequences of the stoppage.

“I’m extremely upset and extremely angry,” he said. “Why should I do such a dangerous job for so little money? I’m 25, I don’t want to do that job for the rest of my life.”