The Platinum Industry Strike is Over: What now?

The Platinum Industry strike might be over but Traumatic Changes await both Parties

Normally after a strike is over, the tensions rapidly abate and the situation swiftly returns to normal. In the case of the Platinum Industry strike, the underlying causes are much more deeply rooted and entrenched. Worse still, like a spectre hanging over it, are the ghosts of the Marikana Massacre.

In no small measure, both parties in the dispute including government will find the process ahead both arduous and possibly intractable.

Contrary to Joseph Mathunjwa’s expectation that there cannot be any restructuring in the Platinum Industry on conclusion of the settlement deal, this is inevitable albeit not undesirable result.

This strike has fundamentally transformed the mining industry business model. Let us recapitulate: crudely this model was based on employing the most number of people with the quid pro quo that it could only occur at the lowest possible wage rate. This is not merely cold-hearted capitalistic logic but rather a device to provide gainful employment to as many people as possible. In fact this was the initial basis for employment in most developed countries today.

Platinum industry strike 2014 #2

When that logic is remoulded by resetting the base wages drastically upwards, such as after the General Strike in the UK in 1926, the other half of the bargain viz mass employment also has to be reordered. In a large measure the ANC is subconsciously aware of this formula but accepted it as part of a Faustian Bargain. But AMCU’s intransigence has figuratively upturned the proverbial apple cart and, to mix metaphors, they cannot put Humpty Dumpty together again.

A new order will arise from this debacle.

Firstly let us consider what the impact will be upon the Mining Companies.

According to Mark Cutifani, Anglo American’s Chief Executive “the four-month battle with labour union AMCU at its local platinum mines was inevitable because the requests by workers are unsustainable. What’s being asked, for us is unsustainable. And at the same time, the productivity in the platinum sector is one tenth the productivity in the Australian mining sector and we are paying one fifth of the wages.”

Therein lies the nub of the problem: productivity. Low wages partly compensated for the abysmal productivity but now even that tenuous saviour has been shattered.

Whatever Joseph Mathunjwa and AMCU declaim in this regard will come to naught. Mechanisation and higher productivity is ineluctably on the horizon.









The other side of the coin to be addressed are all sociological and psychological aspects.

The workers have to have a sense that they are receiving a fair share of the pie. Furthermore they require a sense that they have a stake in the industry’s well-being and its long-term future and sustainability. Management’s task will be to build a sustainable model for how the business needs to operate given the new realities. Convincing workers that productivity now has to more than double in order to have a sustainable industry will be a hard sell.

Comments by CEOs such as Chris Griffiths justifying why his 12 executives require a bonus of R53 million are totally unhelpful in this regard.

Unlike the gold mines which are at the end of their lives, these mines still have a 50 year working life. From a sociological perspective, three aspects have to be addressed with alacrity:

  • Creating stable communities
  • Improving the living conditions
  • Banning migrant labour

In communities where the families live far away – normally in the Eastern Cape – together with borrowing from unscrupulous lenders at rapacious rates creates a dysfunctional society.

Shanty town

These flaws have long since been recognised. Extensive plans have long-since been drafted to address them but due to jurisdictional and other obstacles, no progress has been made in this regard.




Building stable communities whilst providing workers with a sense of a stake in the business are devilishly hard to achieve. Gone are the days where these intractable Gordian Knots can be blissfully ignored.

AMCU having forced the Industry’s hand will now have a negotiate something more ephemeral than Rands and Cents: a sustainable future for the industry with all that it entails.

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