Striking platinum miners in SAfrica sign wage deal to end 5-week strike at Lonmin PLC mine

MOOINOOI, South Africa – Striking platinum miners in South Africa have signed a wage deal ending a bloody 5-week strike at the Lonmin PLC mine that had spread to the gold and chrome sectors of the industry which anchors the economy of Africa’s richest economy.

The agreement for the company’s 28,000 miners ends a strike with political and economic repercussions, but does not resolve rage engendered by the country’s huge inequality and the government’s failure to address massive unemployment and poverty.

Reporters watched as representatives of three unions, of strikers not represented by any union, and the London-registered company signed the deal late Tuesday night.

Lonmin agreed to pay a gross monthly wage of 11,078 rand ($1,385) to rock drill operators who had been demanding a take-home monthly wage of 12,500 rand ($1,560). They also agreed to pay all miners a once-off payment of 2,000 rand ($250). A statement from the company said the agreement includes a previously agreed upon 9-10 per cent raise for certain employees in October, and addressed the issue of promotions for some categories of workers.

The strike had spread to gold and chrome mines, scaring foreign investors in Africa’s largest economy and, according to President Jacob Zuma, costing the country at least $500 million.

Media coverage of miners living in tin shacks without electricity or running water has highlighted government failures to improve the lives of the majority of poor South Africans suffering high unemployment and poor education and health services.

Abey Kgotle, executive manager for human capital at Lonmin, said that the workers agreed to return to work Thursday and production will likely resume in a matter of weeks.

“This is a groundbreaking agreement,” he said. “We are very pleased to reach the conclusion of this agreement.”

The trouble began Aug. 10 at Lonmin and ended up killing 45 people. On Aug. 16 police opened fire on demonstrating strikers, killing 34 of them and wounding 78 in the worst state violence since apartheid ended in 1994. It traumatized the nation of 48 million and raised questions about how much the poorest of the poor have benefited since white rule ended.

“Mission accomplished!” was the message inscribed in black ink on the hand of one striker in a crowd some 5,000 addressed by Bishop Seoka on Tuesday.

Joseph Mathunjwa, of the Association of Mining and Construction Workers Union, said the deal opens “a new chapter as to what work we still have ahead of us.”

“And as much as we regret about those lives we have lost in this journey, surely we have learned something about how to engage in the future,” he said.

The violence was rooted in rivalry between the dominant Union of Mineworkers, which is allied with the governing African National Congress and is accused by workers of being too preoccupied by business and politics to take care of the basic shop-floor needs of its 300,000 members.

“You have won as workers!” Seoka told the crowd, who cheered, sang and danced.

Seoka was among mediators at government-sponsored negotiations.

The end of the strike — which has cost Lonmin more than 20 per cent of its share value and forced it into negotiations with debtors wanting payments due at the end of September — has not resolved far bigger issues in South Africa.

The strike has highlighted the country’s widening gap between the majority poor and a small black elite enriched, often corruptly, through shares in mines.

Despite promises by the ruling African National Congress to redress the concerns of its major constituents, South Africa has become the most unequal nation on Earth, and raised questions about Zuma’s leadership just as he prepares for a crucial governing party congress in December that will decide whether he gets another term as leader of Africa’s richest economy.

Government plans in the aftermath of the brutal apartheid regime to share the wealth of a country that provides 75 per cent of the world’s platinum, a fourth of its chrome and is in the top 10 of gold producers have made a small handful of blacks billionaires, joining a small white elite that continues to control an economy dominated by mineral resources and agriculture.

South Africans have become increasingly enraged by the disparity, which has weakened trade unions and a government alliance that includes the ruling party and its partners the Congress of South African Trade Unions and the South African Communist Party. The alliance was fractured over Zuma’s continued leadership even before the strikes, which have jeopardized his future as South Africa’s president.

On Monday, the head of the trade unions suggested that government failures could bring down the ruling party. COSATU President Sidumo Dlamini said that 30 million of South Africa’s 48 million people survive on less than 10 rand ($1.25) a day.

“What we see happening (in Lonmin’s mine) at Marikana and elsewhere is that workers are essentially demanding a living wage. Workers are simply saying we produce wealth and we want our reasonable share, and they expect to be given a fair share … This is a reflection of the demands being harboured by millions of our people,” he said.

The Lonmin workers were the first to strike, and in recent weeks seven other mines had work stoppages, including six platinum mines, a gold one and a chrome one.

Anglo American Platinum is the world’s largest producer of the metal used in jewelry and to reduce carbon emissions of high-end vehicles. The company said it was using police protection Tuesday to resume operations at four of its mines in the Rustenburg area, where Lonmin also is located.

Anglo American Platinum had claimed its workers were not striking, but that it had shut down operations to ensure their safety against violent threats. But it did not say Tuesday how many workers had reported for duty.