Tuesday, September 9, 2014

The aftermath of the 2012 Marikana tragedy

It has been a bit more than 2 years since 34 mine workers were killed by police in what became known as the Marikana massacre [ft.com], a South Africa based, Lonmin [lonmin.com] owned platinum mine. Protests had erupted over working and living conditions and pay [tandfonline.com]. The fatal riot was featured at the time at the OxCARRE blog, which pointed to the Economist's analysis laying the root cause of the tragedy to government management of mining sector in South Africa.

Controversy existed since the start over whether the police had acted in self-defence in the face of violent mine workers, or had been overly violent themselves. A government inquiry was established and independent researchers have done their own studies. The picture that seems to emerge is that the tragedy was preventable and police may have been instigated by Lonmin executives and/or government to act violently against the protesters (book by Johannesburg based academics [books.google.com], p3; NRC Handelsblad [nrc.nl], in Dutch subscribers only). The inquiry is still ongoing and a few days ago South Africa's deputy president Ceryl Rhamaphosa was accused by the mineworkers' lawyer of having ordered the police to use violence against the mineworkers. Mr. Rhamaphosa denies he acted in such way and stated [ft.com] that "the tragedy 'has to be approached as a collective failure by many role players.'" Mr. Rhamaphosa is currently one South Africa's wealthiest businessmen, at the time of the tragedy a non-executive of Lonmin, and formerly a union leader (and founder) of NUM. NUM was deemed by the mineworkers to be closer to business executives and the government then to their interests, which was one of the reasons they started their 'wildcat' strike or switched alliances to non-government backed unions. In all the strikes, and ultimately the tragedy, are a culmination of the failures to deal with apartheid racial differences, exploitation of migrant workers, including foreigners, and to conduct wage negotiations that result in a fair and supported outcome (Report of government backed labour market research body [lmip.org.za]).  

Meanwhile, the Guardian [theguardian.com] reports that Lonmin is planning to restructure (meaning closing or selling some of their mines) after 2 years of bad performance and a 5-month strike this year (its share price has decreased by 60% since the tragedy, but it was already in decline long before that). Lonmin [lonmin.com] denies decisions on the restructuring have been made. Costs have increased as the strikes have led to higher pay for both Lonmin and competitors' operated mines, while platinum prices have decreased [nasdaq.com] over the same period. For instance, AngloAmerican Platinum is also closing its least profitable mines [reuters.com] after miners had negotiated pay increases.  Strikes, reducing output up to 5.7% quarter-on-quarter, in turn has had a major impact on South Africa's economy, so much that the economy reported [ft.com] negative economic growth. There are also rumours that the trading giant Glancore was considering decreasing its 2013 acquired 25% stake in Lonmin. These rumours were more or less denied [miningglobal.com]. The closing of mines risks further unemployment for those that are already doing the lowest skill and most dangerous part of the mining operations.

In closing, Bram Vermeulen of NRC Handelsblad [nrc.nl] (in Dutch, for subscribers only) talked to widows of those miners that were killed about the taboo subject of 'second widows'. Migrant mine workers used to have families both at the mine location and their old homes where they had left there families, giving disputes to rights of compensation to the families of those killed workers. Migrant mineworkers are/were actually stimulated not to live in 'workers' hostels but in shanty towns where they could live with girlfriends or second wives. Consequently, they had to split their salaries over two families, which in part explains their demand for pay increases [limp.org.za, p.14].

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