Analysis: South African mining grapples with decline of union NUM

Reuters News

11/16/2012 2:17:13 PM - Reuters News

By Sherilee Lakmidas

RUSTENBURG, South Africa (Reuters) - In the last three months, it has become a common scene in South Africa: wildcat strikers facing off with police in the shanty towns that ring its platinum mines, leaving the dusty streets strewn with rocks, burning tires and shot-gun cartridges.

Besides latent and predictable anger at the bosses of the giant mining companies, much of the aggression is aimed at the government and National Union of Mineworkers (NUM), a worrying portent for labor relations in Africa's biggest economy.

The NUM is a key ally of the ruling African National Congress, and its rapid fall from grace among many miners has implications for the way South Africa is run.

Although the ANC's domination of post-apartheid South Africa is not likely to be shaken any time soon, a discredited NUM strengthens more militant unions in the governing alliance with Nelson Mandela's former liberation movement, already riven by conflicting allegiances to labor and big business.

In the years after apartheid, the NUM - a 300,000-strong union which turned 30 this year - enjoyed elevated status as a central player in the successful struggle against the white minority rule that ended in 1994.

That reputation, and with it the stability it brought to the volatile world of the mines, is now being read the last rites.

"RIP NUM. Cause of death: corruption" read one of the placards waved by the strikers protesting last month on a rocky outcrop near a mine owned by Anglo American Platinum (Amplats), the world's largest producer of the precious metal.

"NUM must die, NUM must die," the men chanted before turning their ire on President Jacob Zuma, condemned because of the ANC's ties with South Africa's major unions.

"Zuma must die," they continued, keeping up the mantra until riot police opened up with another volley of stun grenades and tear gas, sending the striking miners scurrying for cover in the maze of tin shacks where they live.

"They are not giving up. They will soldier on," said John Tonsi, an Amplats employee for the last six years sporting the revolutionary chic of the renegade mining movement - a black shirt and beret redolent of Che Guevara.

"None of them belong to a union," he added.

TOO COSY

After South Africa's first all-race election in 1994, the NUM cemented its position as the dominant union in gold and coal mines, enforcing a collective bargaining arrangement under which mines agreed wage deals that applied across the industry.

In an implicit pact with the Chamber of Mines, the NUM guaranteed to deliver stable industrial relations. In return, the industry agreed to promote NUM membership.

For 18 years it worked well. Unionization in the mines grew to 81 percent, the highest in any industrial sector. Workers received pay rises slightly above inflation, and mining companies were sheltered from mass industrial action.

That all changed in January, when South Africa's mining bosses got first glimpse of the anarchic world of the mining sector without a strong NUM.

The Association of Mineworkers and Construction Union (AMCU), an upstart rival, spied a chink in the NUM's armor at Impala Platinum's main Rustenburg mine and unleashed a vicious turf war by promising big pay hikes for drill operators.

The six-week strike that ensued crippled Implats production and exposed the fragility of the NUM's grip on power, laying the ground for the worst industrial unrest since apartheid six months later.

In August, police killed 34 AMCU-affiliated strikers at Lonmin's Marikana platinum mine, the bloodiest security incident in post-apartheid South Africa.

The killings, many of them captured on Reuters Television, were beamed around the world and - after the initial horror - unleashed a barrage of questions from investors about the implications for South African labor relations. Within a month, more than 75,000 miners had downed tools across the sector.

"There is going to be soul searching that will happen in boardrooms and also in the employee representative structures," says Implats chairman Khotso Mokhele.

At Impala, the company says the NUM's representation has shriveled from 70 percent to just 13 percent in seven months, figures that the NUM disputes as unconfirmed.

"The recipe book that we have been using in the mining industry for the last 25 years has been changed and been thrown away," said Graham Briggs, chief executive of Harmony Gold, Africa's number three bullion producer.

"It's a new era for labor relations."

TAKEN BY SURPRISE

AMCU's eruption onto the scene, first in platinum mines that had stood apart from the collective bargaining set-up and then the gold sector, appears to have taken the NUM by surprise.

Its leaders say it will not be caught napping again, suggesting it may take a harder line in wage talks to show workers it has the mettle to stand up for them. It won an unscheduled 5 percent wage rise for coal miners last month.

"This has been a wake up call for NUM and we are going to use it," general secretary Frans Baleni said, striking a tone that may have implications for the next round of collective bargaining negotiations due before the middle of next year.

In a bid to reclaim legitimacy, the NUM has twice stepped in to broker deals between more than 30,000 wildcat Amplats strikers and the company, a unit of global mining giant Anglo American. Both times its efforts have been met with disdain by miners and their representatives on ad hoc worker committees.

On Wednesday, Amplats said it was seeing signs that the strike might be ending, although the decision to return to work is being taken by a workers' committee - not the NUM.

"NUM is desperate to stem the crisis because its position, which always seemed so secure, has suddenly been shaken," said Loane Sharp, a labor economist at staffing firm Adcorp.

"NUM at the moment is fighting for its life. In eyes of NUM members, NUM is going through a crisis of relevance."

Meanwhile AMCU, founded by a disgruntled former NUM regional manager in the 1990s, is keeping up the pressure. National organizer Dumisani Nkalitshana says workers are "tired of NUM. They are not happy".

Harmony Gold says there is a strong AMCU presence at its strike-hit Kusasalethu mine. Some 20,000 miners at Gold Fields KDC mines downed tools because of anger at NUM shop stewards.

Companies have persuaded workers to return with extra cash. But wage increases of up to 22 percent, as in Lonmin's case, may drive many mines into the red, especially platinum mines.

"If we are going to continue to give pay rises above inflation those pay rises have to be supported by underlying productivity increases. That is the only way it is going to happen or there will be large scale reductions in employment," said AngloGold Ashanti chief executive Mark Cutifani.

South Africa is the fifth largest gold producer and the world's largest platinum producer. The industry employs more than 500,000 people, who each may support 8-10 dependents.

The unrest has also added to political pressure on the government to force mining firms to spend more on communities, including a suggestion by Zuma that they could lose their licenses if they fail to comply.

However, so far the official reaction has mainly been to brush the trouble under the carpet with a positive spin designed to assuage rattled investors - to the point that Zuma dismissed the Marikana killings as a "mishap".

"The strikes are a cause for concern for us as government but we are confident that it's slowly coming to end," mines minister Susan Shabangu said. "It has not been an easy period."

(Reporting by Sherilee Lakmidas; Editing by Ed Cropley and Peter Graff)