Gavin Capps looks at how platinum has taken centre stage in South Africa’s mining industry—and how workers have paid the cost
Platinum mining is a big part of South Africa’s economy. South Africa holds 88 percent of the world’s platinum reserves and accounts for over three quarters of global platinum production.
In the boom years between 1994 and 2009 the industry grew by 67 percent, making it the single largest component of the country’s mining sector.
The period saw a huge wave of mine expansion and investment, including at British-owned Lonmin, the owners of the mine at the centre of the battle (see below).
With gold in long-term decline because of the difficulty of reaching the remaining reserves, platinum has become the pivot around which South Africa’s mining future turns.
The ANC government has identified mining as central to its new resource-based development strategy. It even plans a “platinum valley” to concentrate platinum-based manufacturing industries.
However, its plans have been severely hit by the global crisis and a dramatic fall in the price of platinum over the past year. The earlier scramble to expand production has now led to a situation of global over-supply.
At the same time, rising wage pressure, electricity and transport costs are squeezing profits. This has led some smaller producers such as Aquarius to temporarily close their mines. All the big players are radically cutting back on their investment plans.
Anglo Platinum—which alone accounts for 60 percent of world platinum production—has been particularly hard hit. It recorded a loss of £20 million in first six months of 2012. For its part, Lonmin has cut its planned spending for the next two years from £285 million a year down to £160 million.
Now the South African ruling class is panicked by militancy. It is particularly scared by the growth of the Association of Mineworkers and Construction Union (AMCU) and its power to shut down production.
It is equally worried by the loss of control by the established National Union of Mineworkers (NUM).
The union has been central to dampening and deflecting struggle since it became deeply embedded with management. Since 1994 it has effectively worked for the government.
A militant strike at the Impala platinum mine in January set a pattern. It lasted six weeks, cost Impala £180 million and stopped almost half of national platinum output.
This strike resulted in a sudden growth of the AMCU at other mines, including Lonmin, which is terrifying the bosses, the ANC and the NUM alike.
Lonmin is the renamed British company Lonrho. The name change hides a shameful history even for an industry as brutal as mining. The firm was originally set up in 1909 to grab mining rights in what was then called Rhodesia.
Even British Tory prime minister Edward Heath called Lonrho’s boss Tiny Rowland “the unacceptable face of capitalism” in 1973.
This was amid allegations of tax avoidance, bribing African leaders and breaking UN sanctions against the racist regime in Rhodesia.
Since gold was discovered in South Africa in the 19th century, more than 80,000 miners have died in avoidable accidents. But this brutality has gone along with a long history of militancy.
The current National Union of Mineworkers first built its strength from strikes in the gold mines under the apartheid regime in 1975. It faced systematic repression.
In 1986 177 miners died in an accident caused by cost-cutting. More than 300,000 miners struck for a day. And in 1987 330,000 miners struck for 21 days, proving the power of the black working class in South Africa.
Gavin Capps is a platinum specialist at the University of Cape Town