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THE BIG READ: Rock and a hard place

Jim Jones | 2012-08-24 00:17:36.0
Drillers at the rock faces of Australian mines earn more than 10 times the wages of their South African counterparts, like those at Marikana platinum mine in North West Picture: FELIX DLANGAMANDLA/GALLO IMAGES

Comparisons can be invidious. Yet, in the wake of the deadly protests at Lonmin's Marikana platinum mine, and with accusations flying back and forth, the question of whether South African miners are being absolutely or relatively mistreated is inevitable.

Take Australia, whose mining sector has close parallels with South Africa's. Both countries' mining companies regularly warn of the dangers of skills shortages.

Paying miners more should, in theory, help overcome the problem, shouldn't it?

Depending on whose figures one takes, Marikana rock-drill operators earn an average of R8000 a month (R10000 gross, according to Lonmin). The Association of Mineworkers and Construction Union, which is fighting to displace the National Union of Mineworkers as the workers' representative, helped trigger the latest bout of violence to shake the platinum industry with demands that the monthly wage be lifted to R12500.

The protesters, it seems, were not all rock-drill operators.

The protests, allegedly, were fomented by unemployed miners.

We'll need to wait for the official inquiry to sort that issue out.

Only days before Marikana, miners had made similar demands at Amplats and at Royal Bafokeng Holdings mines.

NUM is being increasingly portrayed as the poodle of mine owners, a union that is as out of touch with workers' needs as the ANC .

Let's compare South African wages with those Down Under.

The Australian employment consultancy My Career reckons that the average basic salary for drillers and blasters - the men at the rock face - is A$142000 a year or something over R1.2-million.

In other words, the Australian drillers' basic wages are more than 10 times those of their South African counterparts. But that's where comparisons end.

Should we compare our mining industry with Venezuela's or Bolivia's, where nationalisation has done nothing for people working in dangerous mines, existing on pitifully low wages and living in squalid conditions?

Australia is no paradise on earth, but its government delivers services efficiently. South Africa is a relative catastrophe, with government foisting responsibility for delivery of services such as medical care, water, housing or education onto the mining companies in more remote areas. In this respect we are little different from countries with dysfunctional governments.

Only a couple of months ago Lonmin's human capital manager, Abey Kgotle, was talking of the challenges facing his company: perceptions that the mines were not investing enough in development of host communities, increasing youth unemployment, union membership dynamics and the social milieu of workers.

Yet Lonmin, and other firms sensitive to the issues, provide extensive social services to their mines' host communities and, in Lonmin's case, to distant Eastern Cape communities home to the company's migrant Pondo miners. Where is the government?

The global debate about executive remuneration is becoming increasingly virulent.

In Lonmin's last financial year CEO Ian Farmer raked in a package equivalent to R16-million, some 130 times the wage of a Marikana rock-drill operator, and he was running a company with sales of $2.2-billion.

In Australia, Marius Kloppers, the CEO of BHP Billiton, was rewarded with the equivalent of R90-million, 75 times the salary of an Australian driller. But he was running a diverse group with sales of $72-billion. In relative terms, where is the greater equality between the boss and employees?

Is this relevant to the current situation? Disparities figure regularly in the rhetoric of individuals seizing on miners' grievances for their own ends.

But it's hard to believe that ordinary miners are aware of the wealth of people like Farmer or even, say, Patrice Motsepe or Julius Malema.

Malema has seized the Marikana opportunity to repeat his nationalisation demands and win support with xenophobic claims that Lonmin is controlled by British interests.

Does this sway the miners, who are concerned with their personal economic plights?

It probably colours the views of those British investors targeted by Lonmin in its mooted $1-billion rights issue to refinance and develop its mining operations.

Given the latest violence, it is an open question which of the British shareholders reviled by Malema might contribute new capital for South Africa.

The Marikana violence could not have come at a worse time. It's no secret that South Africa's platinum companies are struggling. There are the rising costs of mining at ever-greater depths, work stoppages that hack production, and electricity outages as the state-owned Eskom dithers.

They are also struggling with low platinum prices, with slackening demand from the world's vehicle industry, and with growing competition from Russia and Canada.

Loss-making mines have been closed and companies such as Anglo-American are reappraising their South African operations. Jobs are on the line.

Meanwhile, a luta continua.

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