The future of the Platinum Belt: Disaster or Compromise?

by Tess Conradie and Nomava Vena

The day of the Marikana Massacre is a dark one in South African history.

The deaths of 44 people left the country in shock as the aftermath of such devastation brought the platinum mining industry to its knees.

Now, almost 2 years later violent protests grip platinum mines once more. After a four-month long strike led by Association of Mineworkers and Construction Unit (AMCU), employers have called for workers to return to work on the 14th of May 2014. AMCU insists that workers will not return until worker’s wages are increased from R5000 to R12 500 a month. If a compromise is not reached, history may repeat itself.

A key issue with regards to the current volatile situation between the platinum mines and the mineworkers is that there is no easy solution. The workers are demanding a significant pay increase in a short period of time. Although there is an offer  to meet this pay rise by 2017, AMCU demands that this rise be met immediately.

The employers are of the view that this is not economically viable.

The argument goes that no company can afford a salary increase of over 50% for all its employees in one financial year. Employers say they cannot meet AMCU demands and as such, run the risk of further violent protests, significant production and financial losses.

Having said that, the employers are increasingly hard-pressed to  justify the huge income and bonuses it pays to its management. The Lonmin 2012 annual report shows its former Chief Financial Officer earned just over R1.2m a month, whilst an average rock driller, performing a dangerous and critical job, takes home a meager R 5 000 month. The question is how does senior management  justify the fact that it pays millions to a few members at the top of the chain, whilst those who risk their lives underground struggle to put food on the table for their families?

Looking at both perspectives it is clear that a compromise must be reached between management, AMCU and NUM in order to avoid bloodshed and a further loss of life. In the past week alone four people have been killed, including the wife of one of the workers.

The anger of the mineworkers and the perceived inequality in the pay,  must be tempered and controlled to see an agreement reached between the two. A fair compromise would be one in which employers agree to freeze current annual bonuses given to senior management for the foreseeable future and lower their salaries at the beginning of the 2015-2016 financial year to contribute towards incrementally increasing the salaries of mineworkers at a faster pace than the current promise of three years.

Although this may not be sufficient to pay the miners the increase they are demanding immediately, it may help lessen the anger of the workers. Mineworkers would, as a result, agree to go back to work this month to avoid loss of income.

Neither the platinum companies nor the mineworkers will be satisfied with this agreement but that is the beauty and ugliness of reaching a compromise. The end of this volatile and violent situation would see a return to stability within the platinum sector and a more efficient economy. It would also ensure that no further lives are lost. Best of all, they can begin the process of rebuilding trust.

In these troubled times it would do a great good to remember John F. Kennedy’s words: “Let us never negotiate out of fear. But let us never fear to negotiate”.

This article was written by Tess Conradie and Nomava Vena as part of the Academic Skills Module for the 2014 MBA Class. 

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