This page has been archived and commenting is disabled.

Lonmin's South African Miners Get 22% Wage Increase, End Strike

Tyler Durden's picture




 

It appears that the strike that had crippled South Africa's precious metals industry is coming to an end. Reuters reports that striking miners at Lonmin's Marikana mine in South Africa said on Tuesday they accepted a management pay rise offer and would return to work on Thursday after six weeks of mining sector unrest that shook Africa's largest economy. The cost to get back to work? A 22% hike in wages, and a corresponding crunch in corporate margins (which we hope finally clears up to all those who have been so confused for years why a surge in the underlying PMs usually tends to backfire on the miners extracting it, as labor costs surge as much if not more). "The gathered strikers cheered near the mine, 100 km (60 miles) northwest of Johannesburg, when they were informed of the 22 percent wage increase offer, a Reuters witness said." Lonmin is not alone: "In another sign that weeks of labour unrest in South Africa's platinum belt could be ending, world No. 1 platinum producer Anglo American Platinum said it had resumed its operations in the strike-hit Rustenburg area. On the news of the Marikana agreement, the spot platinum price fell 2 percent to a session low at $1,627.49/oz and the rand firmed against the dollar."

More:

The six-week conflict in the mining sector, which claimed 45 lives, had also ignited criticism against President Jacob Zuma and his ruling African National Congress. They face accusations from political rivals that they have neglected poor workers and sided with wealthy business owners.

 

"Anglo American Platinum Limited (Amplats) confirms that all of its Rustenburg operations have resumed, effective from today's morning shift," the company said in a statement.

Congratulations to South African miners for finally turning the tide against the global corporation. The question now is: how many laborers, miners and otherwise who have all the leverage in a world in which corporations have gradually fired virtually everyone but the absolutely muscle that drives corporate top and bottom-lines, will follow suit, and demand equitable treatment in a world in which the central bankers are hell bent on sending inflation off the charts.

And what happens to aggregate prices if wages around the world suddenly receive a comparable 22% upward step-function? We will let you know as we find out.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 09/18/2012 - 12:23 | 2807373 malikai
malikai's picture

Platinum dropped hard bringing gold and silver with it eventually.

Tue, 09/18/2012 - 12:29 | 2807403 ParkAveFlasher
ParkAveFlasher's picture

Yep, still shiny!

Tue, 09/18/2012 - 13:04 | 2807521 NotApplicable
NotApplicable's picture

I can haz wage inflation?

(only two weeks away from my .9% "raise")

Tue, 09/18/2012 - 13:07 | 2807535 boogerbently
boogerbently's picture

.....so, what does that put them up to, about 28 cents a day ?

Tue, 09/18/2012 - 13:08 | 2807544 boogerbently
boogerbently's picture

We need to show the 47%'rs here what people will do for so little money. (In the REAL world)

Tue, 09/18/2012 - 16:53 | 2808470 jballz
jballz's picture

 

we need to take away the police force and legislative/judicial system that protects the corporations and see how the 47% restrains themselves from eating their owners out of sheer moral fortitude alone.

 

Oh......wait, well THAT government control is okaaaaaay.

 

fucking idiots.

Tue, 09/18/2012 - 16:51 | 2808461 jballz
jballz's picture

can't swear to the source (think Al Jazeera) but they were pushing for a 100% increase from 750 Rand a month to $1,500.

 

750 Rand is $91, so.....this puts them over 100. Better than $3 a day. I'll bet Gina Rinehart is pissed. She'll never get Aussies down to $2 now.

Tue, 09/18/2012 - 12:29 | 2807405 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

That wage increase will not be seen at the margin.  Producers will raise their selling price. 

Platinum is such a small market and these mines have large pricing power.

Tue, 09/18/2012 - 12:33 | 2807420 Divided States ...
Divided States of America's picture

One day if the Wall Street bankers ever go on strike, the markets will rally.....and when they get their 50% increase in salary and another 200% jump in bonus, the markets will rally even harder. This is the fucked up world we live in.

Thanks fucktard Bernank.

Tue, 09/18/2012 - 12:49 | 2807471 Ratscam
Ratscam's picture

Platinum fell back to a 15 year USD 130 discount to gold. Was 100 USD this morning.

Time to grab some PLT or Palladium calls.

Tue, 09/18/2012 - 12:53 | 2807485 malikai
malikai's picture

http://blog.quantsig.net/2012/09/18/gold-silver-platinum/

Might be a good pair trade or two in there if the premiums are nice. I don't know..

Tue, 09/18/2012 - 12:24 | 2807382 Newsboy
Newsboy's picture

Ahh, collective bargaining!

Tue, 09/18/2012 - 14:04 | 2807800 MachoMan
MachoMan's picture

and 22% of $0 is....

Tue, 09/18/2012 - 12:25 | 2807384 CPL
CPL's picture

With the rest of the market as well it looks like.

Tue, 09/18/2012 - 12:27 | 2807392 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

This is why forming a union works.  Like minds and like situations need to form tribes so to rally for equal rights.

This however only works if you provide an important service [cough] unlike Chi-town's public school system [cough].

Tue, 09/18/2012 - 14:10 | 2807834 MachoMan
MachoMan's picture

It works long enough until the employer lets the employees blow themselves up...  or, what usually occurs sooner, take on too much debt.

Tue, 09/18/2012 - 12:28 | 2807397 darteaus
darteaus's picture

Will they be getting paid in dollars?

Tue, 09/18/2012 - 12:28 | 2807400 fonzannoon
fonzannoon's picture

45 people died for a 22% pay increase. How much were these guys making? If you were making 40k a year would you risk your life to make 48k? This is very easy for me to say but once they started shooting, these guys should have went all or nothing.

Tue, 09/18/2012 - 12:31 | 2807412 centerline
centerline's picture

Time for a 22% reduction in workers with a 22% unpaid increase in work hours for the rest of them.

Tue, 09/18/2012 - 12:36 | 2807432 Divided States ...
Divided States of America's picture

Yup, those 45 lives were given up for the benefit of the many others. I dont know why it is the opposite in America, where the many (middle class) are hosed for the sake of the select few (the 1%)

Tue, 09/18/2012 - 14:06 | 2807809 MachoMan
MachoMan's picture

actually, they weren't given up...  I think the more realistic way of framing it would be to say that 45 guys got shot during the protest...  I'm willing to bet if you managed to stick their ghosts with some truth serum, they'd tell you they weren't planning on getting shot and would rather have the pay raise and their lives back.

Tue, 09/18/2012 - 12:43 | 2807444 Dr. Engali
Dr. Engali's picture

The way the central banks are inflating the currency that 22% won't mean squat soon. They will be on strike again in the very near future. I'd be willing to bet a ham sandwich on it.

Tue, 09/18/2012 - 14:09 | 2807829 MachoMan
MachoMan's picture

Fuck the necessity of more printing, it doesn't mean anything NOW...  capital = infinity; labor = 0

The only hope we can have is that the capture has not been so deep this time as to ensure feudalism in practical perpetuity.

Tue, 09/18/2012 - 19:36 | 2808934 MeBizarro
MeBizarro's picture

They aren't making anywhere near 48k a year so your comment is not remotely applicable.  Go back and read labor history from 1865 to say 1941 or Western European labor history from say early 1800s until 1914.  You will see improvements in working conditions and pay were very gradual & incremental. 

Tue, 09/18/2012 - 12:30 | 2807409 MBB
MBB's picture

With  24.5% official unemployment and an unofficial 35% unemployment rate. How many lay offs will be enforced to increase the unemployment rate to ensure the profitability of the mine.

Tue, 09/18/2012 - 19:39 | 2808939 MeBizarro
MeBizarro's picture

So they should work for substitence wages then?  The problems with South Africa's employment rates have to do with several issues that have nothing to do with the mine strike and largely are vestiges of the apartheid era including geographical isolation of black townships, incredibly poor education system, etc.

Tue, 09/18/2012 - 12:32 | 2807415 ParkAveFlasher
ParkAveFlasher's picture

Palladium 1, Platinum nil.

Tue, 09/18/2012 - 12:56 | 2807496 Gringo Viejo
Gringo Viejo's picture

Would like to offer all Chicago teachers a one way ticket to South Africa. Your brothers & sisters await you! Power To The Pimple!

Tue, 09/18/2012 - 13:04 | 2807520 ptoemmes
Tue, 09/18/2012 - 14:04 | 2807797 grimey
grimey's picture

Given that a 300% raise would've cost $36m, compared to $210m fcf in 2011. I don't think a 22% raise will have particularly frightening implications for the global investor class. The miners are still tragically underpaid and living in sewage, but when the other side owns the police and is t afraid to use them it's hard to reach equitable terms

Tue, 09/18/2012 - 14:08 | 2807821 FranSix
FranSix's picture

The London Gold Pool remains intact.  What disturbs me is that after so many deaths miners are so willing to take any deal at the drop of a hat and go back to work.

Tue, 09/18/2012 - 15:25 | 2808191 Zero Govt
Zero Govt's picture

so Lonmin found a negotiating point (up the wages) a better solution than using taxpayer funded cops with guns to their industrial dispute

why ever did they not try that from the start?

Tue, 09/18/2012 - 15:26 | 2808200 Darth Hayek
Darth Hayek's picture

Too bad their brothers in the diamond mining industry are about to get reamed big time...

Tue, 09/18/2012 - 17:10 | 2808520 WhiteNight123129
WhiteNight123129's picture

Platinum bulls on the run, Lonmin shoudl agree to have their workers stage a riot from time to time so the company can sell its production with futures contracts at nice prices.

 

Tue, 09/18/2012 - 18:59 | 2808831 SmittyinLA
SmittyinLA's picture

The mine owners are the government leaders, most of the miners are imported scab laborers brought in "to do the work that South Africans don't want to do...for $2 an hour" , like in America locals are too lazy and expensive to work the world's richest platinum lode.

 

Do NOT follow this link or you will be banned from the site!