AMCU secures reinstatement of 579 sacked members!

South African students marching during their strike against fees last month
South African students marching during their strike against fees last month

THE Association of Mineworkers and Construction Union (AMCU) said on Thursday it had successfully secured the reinstatement of 579 of its members dismissed in 2013 for refusing to work on a Saturday.

The Labour Court last Tuesday ruling in favour of 579 workers at AngloGold Ashanti’s Vaal Reef Shaft was a signal that hard-fought gains won by the labour movement such as the right to overtime had been eroded in recent years, AMCU president Joseph Mathunjwa said on Wednesday.

Speaking at a briefing in Johannesburg, Mathunjwa said the judgment had secured 12 months of back pay for the dismissed employees. AMCU still needed to engage with the company on assisting the employees’ return to work, however, a number had either died or committed suicide in the interim, he said.

AngloGold-Ashanti on Thursday noted the ruling, alleging the strike in April 2013 had been accompanied by acts of violence and intimidation, including the serious assault of an employee. AngloGold sopkesman Chris Nthite said: ‘The company is studying the detail of the judgment with a view to determine its options.’

AMCU is also expected to resume wage negotiations with Sibanye Gold in early 2016, following the Christmas break, Mathunjwa said on Thursday. The union was still awaiting a Labour Appeals Court judgment that would determine their right to strike at other bullion producers before deciding whether to down tools at Sibanye.

Producers, with the exception of Sibanye, have already concluded wage deals in this year’s round of negotiations. A lack of a clear majority at Sibanye has meant AMCU still has the right to strike at that company, which has already struck a deal with the National Union of Mineworkers (NUM), United Association of SA and Solidarity.

Meanwhile an explosive political crisis is brewing over platinum mining company Lonmin’s plans.

To survive the slump in platinum prices, Lonmin may need to reduce production. The trouble is, it will mean fewer jobs in a country that can’t afford to lose any. In a letter to shareholders, Lonmin said it may ‘cease trading’ should a refinancing plan fail.

While it can also sell assets, there will be ‘no certainty’ that could be done ‘in the available timeframe on acceptable terms, or at all,’ it said. With prices of the metal near six-year lows, the current plan to raise $400m in a share sale could prove inadequate, said South African stock market trader Arqaam Capital and Avior Capital Markets.

That would put Lonmin on a collision course with the ANC-led government, with one in four workers unemployed in South Africa. More job losses risk deepening a rift between the government and mining companies, which already plan to fire as many as 19,000 workers as commodity prices decline, costs surge and the economy is close to recession.

In August, the government, mining companies and unions adopted a 10-point plan to try to curb job losses, which included finding buyers for distressed assets that could be run profitably under different management. The Association of Mineworkers and Construction Union (AMCU), which is the biggest representative of platinum employees and whose members were notoriously shot and killed by ANC police at Lonmin’s Marikana site, didn’t sign the proposals.

AMCU is monitoring developments at Lonmin, spokesman Manzini Zungu said. He said: ‘It is of concern to us. We have people who work there who support families.’ The ruling African National Congress (ANC) is under pressure to placate its trade union allies, create 6-millions jobs by 2019, and stem a loss of support to opposition groups such as the Economic Freedom Fighters, which has campaigned on promises to nationalise mines.

‘It’s a politically explosive situation because job losses can trigger social instability,’ Mzukisi Qobo, an associate professor at the University of Johannesburg, warned on Thursday. ‘There is going to be a fallout. While some actors within government understand the dire situation that Lonmin is faced with, the rest have absolutely no clue.’

In July, Gwede Mantashe, secretary-general of the ANC, branded mining companies as ‘lazy’ for firing staff rather than considering alternatives. Mining executives say the politicians’ stance, together with prolonged uncertainty over laws and an unreliable power supply, threatens their companies’ survival.

The industry employs about 440,000 people locally and makes up more than half the nation’s exports. For Lonmin, crippled by a five-month strike last year and a 58% drop in the platinum price since it peaked in March 2008, scaling back to focus on its most profitable assets is its only survival option, observed Richard Hart, an analyst at Arqaam Capital in Johannesburg.

Hart said: ‘The rights issue in our opinion is just plugging the hole for two years and then they’re in a cash problem again. ‘The business plan is entirely predicated upon a recovery in platinum prices. We don’t see that happening soon.’

Lonmin should reduce annual output by two-thirds to 250,000oz and outsource refining, said Adrian Williams, an analyst at Avior. This will result in a similar-sized cut to the workforce of 35,000 people, he said. Williams said provocatively: ‘If survival is what you want, then this is your answer. Rather cut off the leg, or maybe both legs that are gangrenous and let the body survive.’

Lonmin has already cut 2,600 jobs in the year to September. Further reductions will add as much as $150m to its expenses and won’t be well received, Barclays analysts Andrew Byrne and Ian Rossouw said. ‘We question whether the government will allow these necessary shaft closures,’ they wrote in a November 5 note.

If the capital raising is successful, it will ‘simply prolong the financial stress of the broader industry and potentially jeopardise the sustainability of the other 1.5-million ounces produced in the region and associated 100,000 jobs,’ they wrote.

So far, the Public Investment Corporation (PIC), which looks after state employees’ pensions and is the continent’s largest money manager, is the only investor backing the share sale and will underwrite an unspecified ‘material portion’ of it.

It’s ‘the best decision under the current circumstances,’ the Pretoria-based PIC said. Not supporting Lonmin could put the company at risk and it could potentially be harmful to the industry and the communities where Lonmin operates, as well as the economy at large.’