South African platinum workers strike over job cut plans

http://www.guardian.co.uk/business/2013/jan/16/south-african-platinum-workers-down-tools

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The South African government and its trade union allies are attempting to head off a new crisis in the mining industry after platinum workers at three pits downed tools on Wednesday in protest at plans by Anglo American Platinum (Amplats) to cut 14,000 jobs.

Mining minister Susan Shabangu said the world's biggest platinum producer had shown arrogance by failing to consult properly with the government before making the announcement to close four pits.

The halt in production after the spontaneous downing of tools by key groups of Amplats miners drew fears of a new crisis in South African mines.

Amid a breakdown in labour relations, more than 50 people were killed in violent strikes in the platinum belt, near Rustenburg, west of Pretoria, in August and September last year. The worst violence happened at Lonmin's Marikana mine where 34 demonstrators were killed and 78 injured when police opened fire with live ammunition on 16 August.

The strikes in the mining sector – which employs more than 400,000 people in South Africa – spread to gold and iron ore mines, causing the country's biggest trade deficit for four years as it was downgraded by ratings agencies.

The National Union of Mineworkers said it would meet its shop stewards at Amplats on Thursday to try to convince them not to call a strike. "If they go on an unprotected strike, the employer will easily dismiss them without any retrenchment packages," said NUM spokesman Lesiba Seshoka.

But last year's mining strikes demonstrated that the NUM has lost its influence among the rank-and-file of South African miners. They consider the NUM — which fought for the rights of low-skilled black miners during apartheid — to be too close to African National Congress figures who have benefited from black empowerment deals. Many miners have joined smaller unions such as the 10-year-old Association of Mining and Construction Union (AMCU).

Amplats, which is owned by London-listed Anglo American, on Tuesday announced plans to consolidate its Rustenburg operations into three mines and sell its Union Mines operation, as part of moves to deliver R3.8bn (£270m) of annual benefits within two years. The company blamed declining worldwide demand for platinum and a rise in overheads such as electricity prices. It pledged to help retrenched miners start their own small businesses.

Earlier this month, Anglo American appointed a new chief executive, Australian Mark Cutifani. Investors want him to cut the multinational's exposure in South Africa, whose mines they consider under-mechanised and overly reliant on a large, cheap workforce. About 37% of Anglo American's assets are based in South Africa and generate about half the group's operating profits.

But Amplats chief executive Chris Griffiths denied that the move to close three mines in Rustenburg signalled the start of Anglo American's exit from South Africa. "By creating a sustainable, competitive and profitable business, we will be in a stronger position to continue substantial investment, provide more secure and stable employment, and to benefit our customers, suppliers, shareholders and the South African economy as a whole," he said.

But it was not clear why the company appeared to have short-circuited the bargaining process. One union, the United Association of South Africa (UASA), said workers and unions were given the news of the job cuts at the same time, which was not the usual way such announcements are made.

Under South African law, companies must hold a 60-day consultation process before cutting a large number of jobs.

Mining minister Susan Shabangu told South African radio: "The regulations say we need consultation, not on the basis of time-frames but on the basis of trying to find a solution for all of us. Amplats continues to be arrogant, and undermining stakeholders. They have been playing games with us."

While Amplats operations remained at a standstill last night, police said there had been no violent incidents.