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The challenging business context

This has been yet another very difficult year for the South African platinum sector during which it has been confronted by ‘a perfect storm' of challenges. The crippling five-month strike across the platinum belt in Rustenburg comes on top of a subdued global PGM market, a continuing rise in unit costs and reduction in margins and productivity, and ongoing challenges around access to skills as well as critical infrastructure such as electricity, water and transport. In a country with one of the highest levels of inequality globally, where unemployment and poverty remain high, and where service delivery by local government has been slow, mining companies are facing heightened expectations from neighbouring communities for jobs and the provision of services. At the same time, the sector is facing an increasingly stringent (and at times uncertain) regulatory regime, greater pressure for more rapid progress on black economic empowerment, and growing demands for greater efficiencies and a more commensurate return by an increasingly weary investment community.

The losses caused by the strike have severely impacted all stakeholders: the already low levels of trust between employers, workers and government have dropped further; the desperate living and social conditions of many workers in some areas have worsened; and potential productivity levels have declined, threatening the viability of some shafts. In some areas, the dignity of the workforce continues to be undermined by the ‘master and servant' culture that has plagued the industry throughout the apartheid era.

The financial impact of the strike has been considerable: the industry lost R24 billion in reduced revenues, and across the industry employees lost R10 billion in wages (for some workers it could take up to five years to recoup lost wages), while many suppliers have seen their businesses threatened following the reduction in economic activity. The country as a whole has experienced a resulting drop in economic growth, reduced tax revenues and increased pressure on global investor confidence and South Africa's credit rating.

Finding lasting solutions to these challenges will require a collaborative partnership between business, government and labour, informed by mutual trust and respect. For this partnership to work effectively, each of the stakeholders will need to be willing to question some of the fundamental assumptions that they may have long taken for granted.

The platinum strike – highlighting some structural challenges

On 23 January 2014, AMCU formally embarked on a strike at Anglo Platinum, Impala Rustenburg and Lonmin. The strike was more than a conventional wage strike – in many respects it represented a clear campaign by AMCU to address some of the fundamental historic imbalances created by apartheid and the mining sector.

The emergence of AMCU as a majority union in the platinum belt, challenging the traditional dominance of the ANC-aligned NUM, has ushered in a new era in the history of industrial relations in South Africa. It has prompted the sector to reflect deeply, not only on the traditional conditions of employment in the mining industry, but also more broadly on the nature of the sector's business model. Although the strike has ended with a three-year settlement agreement signed on 24 June (see here), many of the systemic challenges underpinning the strike still have to be addressed.

Additional questions remain regarding the manner in which the negotiations have been conducted, the nature of the union rivalry, politicisation and violence that accompanied the strike, and the persistence of the majoritarian labour system.