May 20, 2014 1:05 pm

South Africa’s Teba digs for solution to century-old mining issue

©Reuters

Lonmin was among the three largest platinum miners in South Africa where output was severely restricted due to the strike.

With a history that stretches back more than a century, Teba, a company that is at the heart of South Africa’s mining industry, has been witness to numerous periods of tumultuous upheaval.

Twenty years after Teba was established, striking white miners took up arms to protest against wage cuts and the influx of cheap black labour in what became known as the 1922 rand rebellion. In 1987, more than 300,000 black miners downed tools for three weeks demanding better pay and working conditions, a strike regarded as a defining moment in the struggle against apartheid.

Yet Graham Herbert, Teba’s managing director, describes the more than three-month strike crippling Anglo American Platinum, Impala and Lonmin, the world’s three top platinum producers, as “unprecedented” – an event that will shake up the industry.

His fear is that it will lead to mass retrenchments, possibly tens of thousands in a country battling rampant unemployment. His warning is that unless the industry, in co-operation with the government and unions, adapts and addresses some of the festering social and economic issues angering workers, the situation will only deteriorate.

“We have the opportunity to make things significantly better,” he says. “But [if not] it’s going to get worse and the implications are, as we have seen, more violence, worse industrial relations, the real prospect of massive retrenchments and a collapsing industry.”

He links today’s unrest with the violent wildcat strikes in 2012, during which police shot and killed 34 striking miners, a tragedy seen as a warning for the industry and South Africa.

Worker militancy was blamed on anger sparked by miners’ conditions and it was in the wake of the unrest that the Association of Mineworkers and Construction Union, or Amcu, swelled its ranks to become the dominant union in the platinum industry. The latest strike began on January 23.

The union demands that the basic minimum monthly wage be raised to R12,500 ($1,200) over four years. That is double the current basic wage and was the rallying call during the 2012 unrest. Amcu argues that traditional percentage increases are insufficient to elevate salaries to a “living wage”.

Companies counter that Amcu’s demand is unrealistic as the parties remain poles apart.

South Africa has been one of the top mining destinations since the late 19th century, with its rich mineral reserves including diamonds, iron ore, platinum and coal.

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And in spite of a natural decline in its once globally dominant gold sector, the industry remains a bedrock of the economy, contributing about 5 per cent of gross domestic product and providing around 500,000 jobs.

Teba has some 323,000 miners on its books, mostly in the deep-level, labour intensive gold and platinum sectors, with the latter the largest employer in South African mining.

Under colonialism and apartheid, companies relied on a secure supply of cheap black labour, with Teba, set up by the Chamber of Mines in 1902, facilitating the recruitment and transport of migrant labourers from rural South Africa and neighbouring countries, particularly Mozambique and Lesotho.

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In the 20 years since the first democratic election, the industry has been slowly reforming, while Teba is now a privately owned company, whose executive chairman, James Motlatsi, was the founding president of the National Union of Mineworkers.

Yet Mr Herbert says the industry has not transformed fast enough, describing its performance as “suboptimal”.

“Do I think there are any people in the industry who feel proud about what the industry has achieved in the last 20 years? I don’t think people can honestly turn around and say, ‘yes, we are proud’. We have messed stuff up,” he says. “We’ve ignored stuff for too long, I think we got our priorities wrong and Teba has a historical responsibility to play a role here.”

He refers to the treatment of current and former miners who go home to poor, undeveloped labour-sending rural areas with little support. For example, he says, some 250,000 retired miners are owed around R5bn in provident fund payments, while another 200,000 are due outstanding claims for silicosis, an illness caused by the inhalation of silica dust.

Teba is pushing for the reform of the migrant labour system, which is blamed for causing many of the social and economic travails workers face.

Many workers originate from poor rural areas and only return home once or twice a year. At the mines, tens of thousands take the companies’ offer of a “living-out allowance”, about R1,800 a month, rather than stay in company accommodation to supplement their wages.

The consequence is large communities of miners living in impoverished shanties, sharing toilets and taps with dozens of others. Often miners take on second families around the mines, increasing the burden on their salaries. The problems are particularly acute in the platinum belt around Rustenburg and Marikana where worker frustration has been on the rise.

To address the issues, Teba is in consultation with the employers to reform the shift system to the benefit of companies and workers. South African mines are notoriously unproductive and on average work about 270 days of the year because of holidays and the shift system, while in other countries they work all year round.

The idea is to alter the system to increase productivity, while miners may work longer periods, but have more time off to visit their homes. In theory, and if viable, it could also increase employment to cover for the extra shifts, Mr Herbert says.

Employment in the mines has been in steady decline for years. In the gold sector, the number of miners has fallen from a peak of around 400,000 to 140,000 as ageing mines have closed. Meanwhile, South African immigration legislation has meant companies are prohibited from hiring novice miners from foreign countries so the number of their employees from neighbouring nations has fallen steeply.

“We think in 10 years’ time there will not be one foreign mineworker [in South Africa],” Mr Herbert says.

He adds that Teba does not expect to be recruiting any miners, local or foreign, for “the foreseeable future”.

He does, however, believe mining has the potential to be a “flagship” for the country, if the industry’s woes are tackled in a co-ordinated manner between companies, unions and the government.

“The blame game is a waste of time. We have really got to look deeply into each other’s eyes and come up with solutions,” he says. “All our efforts, our anger, all or emotions, focused on a solution.”

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