Platinum mines in South Africa have been at a standstill for almost three months, as a wage dispute between workers and the three largest platinum producers, shows no sign of ending. The effect on the country’s platinum industry, labour market and economy is potentially devastating, so why has government not stepped in to resolve the situation?

The platinum companies have lost revenue exceeding R12.9 billion to date, but the strike has also taken its toll on local communities, with workers having lost over R5.7 billion in wages so far. Job security is also being threatened and the National Union of Mineworkers (NUM) has revealed that around 16 000 jobs have already been lost, and this number is expected to increase.

In a country where 8.5 million people are out of work or underemployed, South Africa’s trade unions the biggest obstacle to job creation, says Loane Sharpe, Adcorp labour analyst. “The collective bargaining process – which gives significant power to trade unions and bargaining councils – has allowed two-digit wage escalations to co-exist with falling labour productivity.”

Although Sharpe believes that this will be revised in time because labour unions cannot indefinitely be allowed to “call the shots” because “the political calculus for the ruling party does not otherwise make sense,” Cadiz Mining and Resources division head Peter Major argues that South Africa is not “a normal and genuine democracy.”

In a genuine democracy, Major argues, government would have intervened months ago on behalf of non-striking workers, who are being threatened to stay away from work. “If government wanted the strike to end and really thought PGM was a strategic metal, they could have legally and democratically ended the strike three months ago.”

The platinum bosses of Amplats, Implats and Lonmin have offered the Association of Mineworkers and Construction Union (Amcu) workers a 9% pay rise, with other benefits over the next four years, but negotiations have remained unsuccessful. Amcu is demanding a basic salary of R12 500.

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