Wage talks

Finweek English Edition - - INSIGHT - David Mackay

ti­sa­tion in the work place,” he adds.

Justin Frone­man, an an­a­lyst for SBGS, said in a re­cent note that unions would be­come ac­cus­tomed to ac­cept­ing in­fla­tion­linked wage in­creases. This is not­with­stand­ing NUM’s de­mands for a 60% in­crease for en­try-level work­ers and a blended wage in­crease of in the high teens.

“We be­lieve the new nor­mal of mod­er­ate wage in­creases is fast be­com­ing a re­al­ity and that fur­ther long strikes are fu­tile and have the po­ten­tial to de­stroy the vi­a­bil­ity of SA’s PGM sec­tor,” said Frone­man.

An­other study from UBS sug­gested that in the long term, re­struc­tur­ing in the plat­inum and gold sec­tors in SA was in­evitable.

Ac­cord­ing to Kane Slutzkin, an an­a­lyst for the bank, SA’s plat­inum sec­tor is more pro­duc­tive than the gold in­dus­try but the de­te­ri­o­ra­tion of pro­duc­tiv­ity has fallen in the last three years at a greater rate than in the gold sec­tor. He be­lieves ei­ther a mas­sive ramp-up in min­ing ac­tiv­ity, or the in­dus­try faces re­struc­tur­ing.

“In or­der to re­turn to aver­age pro­duc­tiv­ity lev­els, we es­ti­mate … an in­crease in min­ing ac­tiv­ity by 30%, which we see as highly un­likely, or re­duce em­ploy­ment by 25%, a more likely sce­nario in our opin­ion, driven by the clo­sure of un­prof­itable mines, al­though this is not with­out its chal­lenges,” Slutzkin said in his note.

Roger Dixon, chair­per­son of SRK, a min­ing en­gi­neer­ing con­sul­tancy, ob­served that pro­duc­tiv­ity is bound to fall in th­ese sec­tors ow­ing to the ma­tu­rity of the mines. “Trans­port to the more dis­tant reef faces is get­ting longer, and it gets hot­ter as the mines be­come deeper, which af­fects pro­duc­tiv­ity,” he said.

This is the chal­lenge fac­ing Min­ing Min­is­ter Su­san Sha­bangu who in par­lia­ment ear­lier this week set down plans for “high level en­gage­ment” with min­ing in­dus­try lead­ers and unions in an ef­fort to head off fur­ther civic mis­rule and restore the stand­ing of SA in in­ter­na­tional mar­kets.

There were no de­tails on what may hap­pen, but Sha­bangu, speak­ing in her Bud­get speech, couldn’t re­sist a dig at the in­dus­try say­ing: “The so­ci­etal prob­lem that was ac­cen­tu­ated by Marikana, as well as sev­eral other re­lated oc­cur­rences, ref lect that there have been glar­ing lapses in the im­ple­men­ta­tion of our trans­for­ma­tion too.”

She was re­fer­ring to the Min­er­als & Pe­tro­leum Re­sources De­vel­op­ment Act, pro­mul­gated in 2004 and due for amend­ment any day now. Sha­bangu be­lieved min­ing com­pa­nies had not done enough to en­force it.

“Dur­ing this time (2004 to 2009), ev­ery other stake­holder suf­fered from a case of parochial am­ne­sia in terms of their re­spon­si­bil­ity for the im­ple­men­ta­tion of this trans­for­ma­tion agenda, and we ended up with widely var­ied ac­counts on the ex­tent, or oth­er­wise of the progress,” she said.

A week ear­lier, Sha­bangu called on unions to join against the com­mon en­emy she termed “monopoly cap­i­tal”, al­though as In­vest­ment So­lu­tions head econ­o­mist, Chris Hart, ob­served on Twit­ter: “There is no monopoly cap­i­tal in the pri­vate sec­tor. That i s t he do­main of Eskom, Transnet etc…”

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