A R12,500 spectre, cool heads and wage talks

And, as the gold sector gears up for what are traditionally tough wage talks, the R12,500 minimum wage demand is likely to surface when unions consult their members. The demand will be encouraged by an awareness among miners that gold shares have performed extremely well on the Johannesburg Securities Exchange (JSE).

However, as several analysts have pointed out, the share price is not an accurate reflection of the reality on the ground. Given rising costs, especially of electricity, a number of gold producers are likely to close down shafts with a possibly heavy loss of jobs.

These are all factors that will be discussed when union representatives consult their members in a series of meetings over the coming month. And while inter-union rivalry, mainly between the National Union of Mineworkers (NUM) and the Association of Mineworkers and Construction Union (Amcu) exists, there is at least a cautious commitment on all sides to co-operate.

“We do not have a problem working with any union,” is the official NUM position. This is reiterated by Amcu with the union stating yesterday: “We have no problem with the NUM or our colleagues in other trade unions.” And Chamber of Mines president Mike Teke notes that he hopes “cool heads” will prevail.

Cool heads will certainly be required on all sides, given the relatively parlous state of the mining industry that is particularly hard hit by inadequate and sometimes sporadic power supplies. Unions and employers tend to agree that a crisis exists, although government continues to insist that it is a “challenge” that is being resolved.

However, none of President Jacob Zuma’s pronouncements about energy in his State of the Nation Address seem to have given much confidence. And his mention of more than 15 000MW of hydro power from the proposed Inga project in the DRC may even be seen as wishful thinking.

Inga has been on the cards for more than 50 years and is, potentially, one of the world’s greatest and cleanest energy sources. Generating run-of-the-river power from the Inga rapids is not the problem. Transmission is. Once the generating capacity is in place, getting such power to South Africa will mean constructing and maintaing power lines across many thousands of kilometres and through some of the most politically unstable areas on the continent.

The energy crisis has given additional impetus to the proposal that government adopt an interventionist approach to “strategic minerals”. Coal has specifically been mentioned, but platinum has also been suggested as “strategic”. The unions fear that unless there is decisive state intervention in the sector, thousands of jobs could be at stake.

These fears were highlighted late last month with the announcement by diversified mining company Glencore that, in the wake of low coal prices, it would be shutting down operations at its Optimum mine in Mpumalanga. This would affect some 1,500 jobs.

Job loss fears and the future of the mining industry have also unleashed a potentially crucial and largely behind-the-scenes battle to influence the outcome of the controversial Mineral and Petroleum Resources Development Act that was referred back to parliament on the advice of mineral resources minister Ngoako Ramatlhodi. Both NUM and Amcu favour state intervention, the employers generally do not.

And here, cool heads do seem to be prevailing on the union front, with NUM spokesperson, Livhuwani Mammburu, noting that any moves in this direction “must be informed by an open, thorough, consultative process between role players”. And Amcu president Joseph Mathunjwa cautions that “a proper regulatory impact assessment must be done to examine possible problems that can arise”.

The opinions expressed in this article are solely those of the author. No inference should be made on whether these reflect the editorial position of GroundUp.