Marikana: Lonmin’s dodgy housing record

GroundUp inquiry reveals painfully slow pace of construction

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Photo of shack in Marikana, North West Province
Photo included in the Marikana Commission’s evidence leaders’ Heads of Argument showing a shack occupied by a mine worker and his family. Photo by A Benya.

In 2006, Lonmin promised to build 5,500 new houses in Marikana by 2011, as well as upgrading the old single sex hostels. In the first three years, 3,200 houses were to be built and 70 hostels converted. But by the end of the 2009 financial year, only three of the 3,200 houses had been built and only 29 hostels converted. What’s happened since? Pete Lewis tried to find out.

In the first version of the Social and Labour Plan which Lonmin submitted to the Department of Mineral Resources in 2006, the company promised to upgrade hostel blocks and build 5,500 new houses. By 2009 only three houses had been built. Because of the lack of progress and the appalling living conditions of Marikana employees and their dependents in the shack settlement around the mine, in 2015 the Farlam Commission of Inquiry into the Marikana massacre directed the Department to carry out its enforcement role.

On 17 September 2016, the Department admitted to parliament’s portfolio committee on mining that it had failed to enforce Lonmin’s Social and Labour Plan. The Department pointed out that there was only one enforcement officer in each province, but it agreed with committee members that it would have to be tougher on Lonmin about the slow pace of implementation of its housing programme. Should the Department find that Lonmin had not complied with the legal requirements of its Social and Labour Plan, the company would be put on notice to do so, it said. The Department said it had also rejected the latest draft of Lonmin’s plan because it did not contain costs and timeframes for the new rental housing to be built on the 50 hectares it had donated to the North West Province.

Timeline: 11 years to build less than 4,000 housing units

2006: Lonmin promises 70 hostel block upgrades and 5,500 new houses by 2011, 3,200 houses by 2009

2009: 29 hostel block upgrades and only three houses completed

2014: Lonmin promises 128 hostel blocks will be upgraded, to yield 796 family units and 1,868 single units by end of year

May 2017: Department of Mineral Resources says all hostel upgrades complete, 5,500 houses to be replaced by 4,400 apartments on Lonmin’s leased land using Lonmin’s bulk infrastructure

September 2017: Lonmin promises 3,924 units in all to be completed by October 2017

Lonmin PR officer Wendy Tlou told Groundup that its revised version of the Plan has not to date been approved by the Department.

In a written response to questions from Groundup on 10 May 2017, the Department said Lonmin had met its target for hostel upgrades, but that the 5,500 houses promised had been replaced by 4,400 “infill” apartments, 1,250 of which would be completed by end of 2018.

According to Tlou, these are new rental apartments to be built at Lonmin’s expense on mining premises, with water, electricity, sewerage, and rubbish collection. Beneficiaries are to be selected from a list agreed between the Association of Mineworkers and Construction Union (AMCU) and Lonmin of permanent employees, from novice to team leader grade, on a “first come, first served” basis. There are 20,461 people in these grades, making up 83% of the total permanent workforce of 24,652.

Rents are to be subsidised, and amount to R750 a month for a single apartment, and R1,350 a month for a family, including water but excluding electricity, going up each year in line with inflation.

These rents are 7.5% and 13.6% of the minimum wage at Lonmin for novices, currently R9,921 before other cash benefits, which take it up to about R13,000 per month. The lion’s share of these extra cash benefits is however the “living out allowance” for employee housing costs, so it is not clear at the time of writing whether “infill housing” beneficiaries will receive it.

Tlou said Lonmin aimed to complete 1,240 infill apartments by December 2018, the end of the current five-year plan. Lonmin would make further commitments in the new plan for 2019 to 2024, which has not yet been approved by the Department.

As well as hostel upgrades and “infill apartments”, Tlou said Lonmin has donated 50 hectares of land to the National Housing Development Agency, a parastatal under the National Department of Human Settlements which holds land in trust for Government. This has been handed over to the Rustenburg Local Municipality, which has received funding from the North West Provincial Government to commence building houses on the land.

According to Andrew Wiseman, managing director of Own Haven social housing agency, which is to manage the units and collect rents under a service level agreement with the North West Provincial Government, that has yet to be signed off. 252 units are under construction, with rents ranging from R900 a to R2,200 depending on number of rooms, fixed by the provincial government.

In summary, then, from 2006 till today, hostel upgrading has yielded 1,908 single units, and 776 family units. In addition, according to Tlou, 409 infill apartments have been occupied, 84 built but not yet occupied and a further 747 apartments are under construction, making a total of 1,240 by October 2017.

That means that for the entire Lonmin housing program for its employees, by October 2017, there will, barring accidents or further delays, be 3,924 units occupied. This amounts to 19% of the total eligible beneficiaries of the scheme (excluding workers hired through labour brokers).

Whether or not the Department of Mineral Resources is satisfied with this is not clear. GroundUp asked the Department whether Lonmin was now in compliance with its undertakings in terms of its revised Social and Labour Plan, and what steps the department was taking, if not. An email sent on 17 August was acknowledged but no response has yet been received.

Attempts to reach the leadership of AMCU for comment were also unsuccessful.

What is clear is that it has taken Lonmin 11 years to build houses for less than 20% of its elegible work force. If this pace is not accelerated, it will take about 44 more years to house the rest of the Lonmin workers, not counting the subcontracted “labour broker” workers - a quarter of the total workforce.

A bit of history

After 1994, the old mine hostels where migrant mine workers under apartheid had to live in dangerously overcrowded male-only dormitories, far from their families, were reduced and converted by the mines into more modern single flats and family units, with better facilities.

Most workers did not get these units, or other houses. They did not want home ownership because they regard their homes as elsewhere in the sub-continent, and anyway their low wage meant that they could not afford bank bonds. Instead, they took small “living out allowances”, negotiated as part of their wage agreements with mine management, with which they built their own shacks, or rented backyards from shack owners, in burgeoning “informal settlements”, with uncertain legal status and therefore limited or no access to municipal services.

The mines have never accepted sole responsibility for housing their employees off the mine, citing costs, and pointing to the shared responsibility owed by government under the Constitution. The duty of care of the mines in this arrangement was however enshrined in Social and Labour Plans in terms of the Mining Charter 2002, which controls BBEEE scores for mine companies, and it in turn falls under the umbrella of the Minerals and Petroleum Resources Development Act.

The mines are required to submit Social and Labour Plans to the Department of Mineral Resources in order to get a mining licence, with costs and time-frames for hostel upgrades and the contribution the mine will make towards land and housing of employees in other settlements. These plans are legal documents, enforceable by the DMR once it has signed off on them. They must be renewed every five years.

Now that they no longer have to go home when their contract is over, as they did under apartheid, mine workers often continue living near the mine to make use of income generating opportunities that are scarcer at home. The housing problem around operating mines therefore tends to expand with time, involving not only current mineworkers, but also unemployed ex-mineworkers and their families.



Lonmin’s operations in South Africa are wholly-owned by Lonmin Plc, a UK Company listed on the London and Johannesburg stock exchanges. It is one of the three largest platinum mining companies operating on the Bushveld Igneous Complex, where the Platinum Group Metals were discovered in the first half of the 20th century, and increasingly exploited as demand has increased since then. Lonmin (then Lonrho) began its lease on land for mining in the area nearly 50 years ago in 1969.

The three large platinum mining companies in South Africa now produce 70 to 80% of global platinum group metals. Lonmin, the largest of the three, produces 95% of its output from Marikana. Around 50% of this output is sold on contract to one buyer; BASF Germany (source: Bench Marks Foundation).

Lonmin Plc obtained “new order mining rights” from the ANC government to continue its operations in 2002, with an initial licence until 2037, and an option to renew its licence till 2067. These are very long-term mining operations due to very large proven resources.

According to Wendy Tlou, the company’s new PR officer, Lonmin now employs a total of 32,438 people, perhaps a thousand of them women. 24% of the total are employed via contractors, or labour brokers. They earn considerably less for longer working hours and more dangerous working conditions than other workers, are not included in the Lonmin Housing Program, and have almost no other benefits of employment.

TOPICS:  Housing Lonmin Mining

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