The fragile peace between the South African union …

Relations between unions and South Africa’s mining industry have, it seems on the surface, never been better. After decades of intense class conflict, rooted in the grotesque exploitation that defined the apartheid era, this is no small feat.

First published in the Daily Maverick 168 weekly newspaper.

The latest example of this outbreak of peace is the three-year wage agreement signed on September 16 between Harmony Gold and no less than five unions straddling the ideological spectrum. The deal was certainly decent for workers, with wage increases that were, in general, well above current inflation rates.

The talks, by all accounts, had gone smoothly from the start and never came close to a stalemate or a dispute, let alone a strike. It is a far cry from ten years ago, when the ascent of the Miners’ Association and Construction Union (Amcu) to the Platinum Belt unleashed a vortex of violence that included the 2012 Marikana massacre. .

Amcu’s murderous turf war with the ANC-aligned National Miners Union (NUM) would continue and Amcu would lead a spectacular five-month strike in 2014 against the platinum sector. Gold and other sectors would also be shaken by social unrest.

Since then, South Africa has become poorer and more unequal, with sluggish economic growth unable to keep pace with population growth. The pandemic and its blockages have added to the prevailing economic misery. Unemployment has skyrocketed to a world record of 34.4%, or 44.4% including discouraged job seekers.

So why the triggering of peace? Such an environment can be conducive to union activism. It can also move him. When unemployment is high – and in South Africa it has now reached the cruising altitudes of large passenger planes – wages are often depressed.

For employers, it’s a buyer’s market.

When it’s very low, wages tend to go up and it becomes a bit of a sellers market. So it makes sense that workers don’t push for massive wage increases in today’s environment.

A cynic might note that unemployment in South Africa was also high in, say, 2012 or 2014, when union activism was at its peak. But rising unemployment will eventually pour cold water into this pot. In this regard, an effective rate of 44.4% can be a tipping point.

And, of course, the sky-high unemployment rate and the economic hardships that brought it about are the consequences of ANC policy failures, which one could argue are now undermining the bargaining power of the party’s union allies. in power.

Other trends are also at work here.

One is a consequence of past union activism – it has reaped dividends. Mining companies have accepted for years, even when commodity prices were depressed and margins slim, wage increases that exceeded inflation.

It started from a low base, but over time it has translated into higher real wages for those lucky enough to have a job. Ultimately, this reduces wage demands.

The typical miner also has several dependents, which has been a driving force in wage negotiations in the past. Many undoubtedly have more mouths to feed due to growing job losses in the face of the Covid-19 pandemic and the ANC’s often clumsy policies to contain it. But such a scenario can reduce the appetite for a prolonged strike.

Who wants to go months without a paycheck as household demand increases?

Then there is the specter of mechanization and automation, which is unfolding wherever the difficult geology of SA allows. A union leader who does not realize that rock drilling operators who pay their union dues today can be replaced by a machine tomorrow has not cared.

Corporate culture has also radically changed in recent years with the rise of ESG issues (environmental, social and governance).

Among other things, these address many of the concerns that have been on the work agenda, such as health and safety. It also serves to undermine the role of unions.

In addition to this, South African mining companies often fulfill the role of the state when it comes to providing services such as health services or roads to mining communities.

All of this has taken place against the backdrop of a commodity boom, which has placed South African mining companies in an enviable space for wage negotiations: record prices juxtaposed with record unemployment. This allowed Harmony, for example, to accept anti-inflation pay increases without straining too much.

Many mining companies are now able to continue the trend of watching for rising real wages for their workforce while making big profits and paying big dividends and tax burdens.

It must be said that the scorching prices of some commodities, such as platinum group metals (PGMs), have cooled considerably in recent times for a variety of reasons, including a global shortage of chips that has held back auto production. This has dampened the demand for the use of PGM in automotive catalysts. It remains to be seen how all of this plays out when the next round of wage negotiations kicks off in the GMP sector.

It was not all a bed of roses. NUM and Amcu have taken a tougher tone in their salary negotiations with the Sibanye-Stillwater gold unit. And union rivalry was at the root of the violence that temporarily halted production at the Blyvoor gold mine which was restarted earlier this year. Social tensions are still brewing in many mining communities, as criminal gangs seeking some of the lucrative sourcing action have tried to shake up the industry. Witness what recently happened at Richards Bay Minerals, a unit of global mining giant Rio Tinto.

But the industry’s strained relationship with unions is clearly on the mend. A five-month strike like the one that rocked the platinum industry in 2014 now seems inconceivable. Let’s see if the peace lasts, or if it’s just a truce. DM168

This story first appeared in our weekly Daily Maverick 168 which is available for R25 from Pick n Pay, Exclusive Books and airport bookstores. For your nearest dealer, please click here.

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