An agreement between the National Union of Mineworkers (NUM) and
several coal sector firms has resulted in the end of a strike
involving thousands of employees which lasted over a week.


Mining companies including Anglo, Glencore and Exxaro Resources Ltd.
presented a revised two-year deal on Oct. 9.

Further changes to the deal were made on October 12. The agreement is
for an extra 750 rand ($56) to 1,000 rand monthly, and will be paid
retroactively to June. All workers returned to their jobs on Wednesday
October 14.

NUM, which represents 72 percent of the 17,000 employees covered by
the wage deal, had been demanding increases of as much as 14 percent
for its members.

The bosses and unions began conciliation talks after reaching a
deadlock in negotiations in August. The strike was the first related
to wage negotiations in the coal sector since 2011.

Financial Crisis in South Africa Linked to Decline in Mining

Several factors have contributed to the current downturn in the
overall economy in South Africa one of which is the problems that have
developed over the last two decades in the mining industry. The mining
of gold, diamonds, coal, iron ore and platinum turned the racial
capitalist state into the largest industrial center on the African

Other industries such as manufacturing would have never reached
significant levels without labor intensive mining. Nonetheless, with
the organization of the majority African mineworkers during the 1980s
leading to the founding of the Congress of South African Trade Unions
(COSATU), which became a key ally of the African National Congress
(ANC) even under the former apartheid system, shifted the character of
the relationship between labor and capital. The NUM demanded higher
wages from mine owners and were in a position to shut down production
as was done in major work stoppages during the 1980s.

The struggle for better wages and working conditions were firmly
linked to the demand for an end to legalized racism and colonialism.
Since the ANC took power in South Africa in 1994, there has been
tremendous downsizing in the South African mining industry.

Many gold mines have been closed and production dominance shifted to
other geo-political regions in Africa, China, Australia, the United
States, Canada and Latin America. Prior to the first decade of the
21st century, South Africa was the largest producer of gold
internationally. This situation has changed dramatically over the last

Technologies within the South African mining industry are becoming
more mechanized due to what owners say are rising costs of production.
The militancy of mineworkers over the last three decades has placed
pressure on the owners who are always seeking to increase their profit

A recent article written by Declan Vogt of the University of
Witwatersrand School of Mining Engineering says that ?Our deep level
gold and platinum mines are in trouble. At today?s prices, most are
not profitable. There are many explanations for the high cost: mines
are getting deeper, infrastructure is old, and energy and labor costs
exceed inflation. Given that we have little control over the price of
the commodities, the only solution is improved productivity.
(Mineweb.com, Oct. 18)

This same article goes on to note ?In many other industries,
technology has enabled huge strides in productivity. Even in South
Africa, almost all underground coal mining is now mechanized.?

Consequently, other methods of reducing labor costs, namely massive
layoffs, increased workloads and the cutting of real wages are
currently underway in South Africa. Even in the platinum sector, which
mines the overwhelming majority of the strategic metal globally, there
have been over 10,000 layoffs in the last two years.

Since the unrest at Marikana in the Northwest Province during 2012,
the platinum sector has experienced major changes. Owners have
threatened to retrench up to 35,000 workers while the ANC government
has pressured the capitalists not to engage in deeper job cuts.

Monique Mathys, an economist at the South African Chamber of Mines
said ?Work stoppages, which reduce mining volumes, reduce
profitability. Reduced profitability results in companies needing to
restructure, and to look at modernization options that improve
profitability and ensure sustainability of the operations.? (Financial
Times, May 25, 2015)

Workers Pay for Ownership Decisions

However, the mining firms have reaped billions in profits from the
exploitation of African labor over the last century-and-a-half. A
leading firm in the industry, Anglo American PLC, was initially formed
by German ?migr? to London and South Africa, Sir Ernest Oppenheimer,
along with the U.S. bank J.P. Morgan & Co. Capital was raised from
British and U.S. sources, and therefore naming the firm as such.

Today when workers are demanding a greater return on the productivity
of their labor, the owners are seeking ways to undermine their rights
to a decent wage and overall living standard. Without the militant
organizing and activism of the South African working class, the ANC
would not have been able to gain a majority within the non-racial
government which took over in 1994 and therefore cannot ignore the
plight of union members in the struggle against the bosses.

Ngoako Ramatlhodi, South Africa?s mines minister, said in May 2015
that the ANC government was ?alarmed at the rate at which
retrenchments have been taking place in the industry?. (Financial
Times, May 25, 2015)

Nonetheless, the government is not willing to take control of the
mining industry, nationalizing it under workers? control as a means to
halt the retrenchments and redirect the production of minerals based
upon the interests of the laboring class. Such a series of measures
would prove popular among the masses but would prompt a response less
than positive among the mine owners, international financial
institutions and western governments.

Nevertheless in spite of these dramatic changes, South Africa is still
ranked as the fifth largest gold producer. But the sector has been
consistently shedding jobs since the 1990s. Over the last two decades
the number of people employed across the mining industry in general
has declined precipitously from about 800,000 to below 500,000.

At the end of the final quarter of 2014, gold mines employed about
119,100 people, down from 142,000 in 2012. Platinum sites had 188,400
jobs in 2014, a decrease from a high of nearly 199,200 in 2012,
according to the Chamber of Mines? statistics. The Iron ore sector
employed 21,800 people in 2014, a decrease from 23,400 in 2012.

In the platinum sector much blame can also be apportioned to the
owners who over-produced during the commodities super cycle in the
2000s, and consequently have been faced with ongoing weak prices and
rising costs. As in the capitalist system around the world, it is the
workers that must bear the brunt of mistakes made by the owners and
their executives.

The reduction in commodity prices has resulted in a myriad of
financial problems internationally, particularly in the so-called
?emerging economies.? Western capitalist states in Europe and North
America are concerned by the increasing independent efforts of states
such as Brazil, Russia, India, China and South Africa (BRICS) which
has proposed the formation of an alternative global lending
institution that could challenge the International Monetary Fund (IMF)
and the World Bank.

Imperialist spending on defense and the continuing bailout of the
banks based in the advanced capitalist states also drains resources
that could be reinvested into infra-structural projects aimed at
re-building the cities, improving public services, social services,
scientific research and quality education. However, it will take a
movement of the working class, farmers and the nationally oppressed to
reverse the current course of economic policy which places the growth
in profits as the primary aim of the ruling class.

By Abayomi Azikiwe
Editor, Pan-African News Wire


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