Tuesday, September 18, 2012

[olympiaworkers] South Africa's Lonmin miners accept pay rise to end strike

By Mish Molakeng | Reuters – Sept. 18, 2012

MARIKANA, South Africa (Reuters) - Striking platinum miners at Lonmin's
Marikana mine in South Africa accepted a hefty pay rise offer on Tuesday,
ending six weeks of violent labor unrest that killed 45 people and rattled
Africa's largest economy.

The strikers, grouped on a bare soccer pitch near the mine, 100 km (60
miles) northwest of Johannesburg, cheered when they were told that
management were offering a 22 percent pay increase, and said they would
return to work on Thursday.

"I am happy - and forward with the struggle," said one of the striking
miners, Sithembile Sohati.

"It's a huge achievement. No union has achieved a 22 percent increase
before," Zolisa Bodlani, a worker representative at Marikana, told

At least one analyst expressed concern that the Marikana wage increase
could trigger a rash of pay demands across a mining sector already being
squeezed by low metals prices and rising labor and electricity costs.

Lonmin confirmed that the deal had been signed in Rustenburg on Tuesday

"The agreement includes a signing bonus of 2,000 rand and an average rise
in wages of between 11 and 22 percent for all employees falling within the
Category 3-8 bargaining units, effective from 1 October 2012," it said in
a statement.

In another sign that weeks of trouble in South Africa's platinum belt were
ending, the world's biggest platinum producer, Anglo American Platinum,
said it had resumed operations in the strike-hit Rustenburg area.

The spot platinum price fell 2 percent on the Marikana news to
$1,627.49/oz and the rand firmed over 1 percent to 8.166 to the dollar.

The wildcat mining strikes hitting a major sector of the economy had
depressed the rand, increased the cost of insuring against default on
South African debt and spooked some foreign investors into selling mining


The conflict, most notably the police killing of 34 Marikana strikers on
August 16, had also ignited criticism that President Jacob Zuma and his
ruling African National Congress were neglecting poor workers and siding
with wealthy business owners.

Zuma acknowledged that the wildcat industrial action had caught the
government and powerful allies such as the National Union of Mineworkers
(NUM) on the hop.

"This incident has been a surprise given the established procedures we
have in place," he told reporters in Brussels minutes after news of the

The deal will see wages raised by up to 22 percent depending on the
category of worker but that percentage hike is not across the board,
according to the Solidarity trade union of skilled workers which was not
on strike but took part in the talks.

The rock drill operators who began the strike will receive an effective 22
percent rise on their total package including allowances which will bring
it to just over 11,000 rand per month, Solidarity said.

"The key worry now is that 22 percent wage rises will be seen spreading
across the mine industry. That is hardly affordable in an industry with
such hefty cost pressures already," said Peter Attard-Montalto, emerging
market economist at Nomura International.

Marikana strikers' representative Bodlani said the workers had asked
Lonmin management to promise that they would work with unions to reach
within two years the 12,500 rand ($1,500) basic monthly salary that the
miners had originally demanded.

The company has not yet responded to this. It had previously argued that
paying 12,500 rand a month would put thousands of jobs at risk and
challenge the viability of the business.

In its statement, Amplats said it considered it was now safe for employees
to return to their jobs but acknowledged that "many mining employees are
still to return to work".

It said smelting and other processing operations at Rustenburg were
already at normal levels.

Amplats suspended operations in the heart of the platinum belt last week
when machete-wielding strikers marched on shafts.


The Marikana police shootings were the deadliest security incident since
the end of white minority rule in 1994 and, for many South Africans,
painfully recalled security force massacres of black demonstrators under

In all, 45 people died in the Marikana unrest, which spread beyond Lonmin
to other platinum firms around Rustenburg and some gold mines.

ANC renegade Julius Malema, who was expelled from the party for
indiscipline this year, has used the Marikana unrest to relaunch his
political career and stir up opposition against Zuma ahead of an ANC
leadership election in December.

Malema was barred by police on Monday from addressing the striking miners
at Marikana, but said his campaign to improve workers' pay and conditions
would not be cowed by a government crackdown.

"Not even the president can stop me. Not even death can stop me. My ideas
are out there. Even if I am no more, people will continue those ideas," he
told a news conference.

South Africa is home to 80 percent of all known reserves of platinum and
is a major gold producer. The unrest this year has cost the mining
industry 4.5 billion rand ($548 million) in lost output, Zuma said on

An illegal strike by 15,000 workers at the KDC West mine operated by Gold
Fields, the world's fourth largest bullion producer, continued on Tuesday
as its chief executive said the firm would not agree to demands for a
minimum wage of 12,500 rand a month.

In a separate development, parliament approved a 5.5 percent pay increase
for Zuma on Tuesday, taking his annual remuneration to 2.6 million rand
($315,600) a year.

($1 = 8.2075 South African rand)

(Additional reporting by Agnieszka Flak, Sherilee Lakmidas, Ed Cropley and
Ed Stoddard; Writing by Pascal Fletcher; Editing by Ed Cropley and Kevin

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