South African Violence Returns As All Miners Demand Pay Hike

Tyler Durden's picture

Rumors about the death of the South African miner strike seem to have been greatly exaggerated following the agreement by Lonmin to hike miner pay by 22%. The reason: the precedent has now been set and everyone else demands equitable treatment: i.e., the same pay hike as Lonmin agreed to. From Al Jazeera: "South African police have fired tear gas and rubber bullets to disperse protesters near a mine run by the world's biggest platinum producer Anglo American Platinum, as unrest spreads after strikers at rival Lonmin won big pay rises. Within hours of Lonmin agreeing pay rises of up to 22 per cent, workers at nearby mines called for similar pay increases on Wednesday, spelling more trouble after six weeks of industrial action that claimed more than 40 lives and rocked South Africa's economy." For those curious what it means when the precedent has been set and one corporation has caved on the issue of pay here it is: "Police clashed with a crowd of men carrying traditional weapons such as spears and machetes in a township at a nearby Anglo American Platinum (Amplats) mine outside the city of Rustenburg. Officers fired tear gas, stun grenades and rubber bullets to disperse an "illegal gathering", police spokesman Dennis Adriao said. He had no information on any injuries." So much for the strikes being over: thanks to Lonmin's caving, they have only just started.

"We want management to meet us as well now," an organiser for the militant Association of Mineworkers and Construction Union (AMCU) at Impala Platinum, the second biggest platinum producer, told Reuters.

 

"We want 9,000 rand ($1,100) a month as a basic wage instead of the roughly 5,000 rand we are getting," said the organiser,  who declined to be named fearing recriminations from the firm.

 

A labour activist said workers who had stayed off the job at Amplats, which accounts for 40 per cent of global supplies of the metal used for catalytic converters in cars and jewellery, were inspired by Lonmin and would press on with their demands.

 

"The mood here is upbeat, very celebratory," Mametlwe Sebei, a community representative near Rustenburg, said. "Victory is in sight. The workers are celebrating Lonmin as a victory."

 

President Jacob Zuma expressed relief at the pay deal after criticism from the opposition and media of the government's handling of the crisis - not least in the aftermath of the police killing of 34 Marikana miners on August 16.

 

Further fueling union rivalry, jubilant workers at Lonmin's Marikana mine, 100km northwest of Johannesburg, painted the wage deal as a victory for AMCU over the dominant National Union of Mineworkers (NUM), an ally of the ruling African National Congress.

Naturally, this is all perfectly logical. Yesterday, when reporting the Lonmin news we said:

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.

The answer: everyone.

Our other question was just as rhetorical: "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."

We sure will.

 

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hedgeless_horseman's picture

 

 

"Police clashed with a crowd of men carrying traditional weapons such as spears and machetes in a township at a nearby Anglo American Platinum (Amplats) mine outside the city of Rustenburg.

Zulu!  Zulu!  Zulu!

kaiserhoff's picture

Thank god it's blacks shooting blacks.  Otherwise, this could get ugly.

TruthInSunshine's picture

The government is seriously contemplating a "cat food for labor" program, recruiting prawns from District 9 to do mining work. Krugman is advising the government, and is a huge supporter of inflating the price of cat food this way, even though many seniors may starve.

jeff montanye's picture

not sure about the catfood or the prawns (seems exotically attractive at first reading) but the original post may have a flaw in its reasoning.  

the idea that because a company has fired all but the muscle that drives earnings and revenues somehow gives labor an edge only works if the fired are not available to fill what some call, assuming a union, the roles of scabs.  somehow i think, world wide, there are plenty on offer and few corporations need fear being forced by traditional weapons or otherwise to give a 22%, or any, wage increase to their cowed workers.

JohnKozac's picture

...all for the "Good and Glory of the Crown."

Don Diego's picture

down with the oppressive South African regime....oh wait!

AnAnonymous's picture

They've the power of 'americanism' now...

akak's picture

Give us a clear definition of "Americanism" or shut the fuck up, you insane roadside crapping bigoted troll.

SeverinSlade's picture

It's going to get ugly for miners everywhere.

What I'm curious to know is how it'll impact streaming companies like SLW.  How are streams going to be affected when companies like Goldcorp have to hike wages, which compresses their margins?  Are they still going to happily turn around and sell their silver to SLW at $4-5 per toz?

Solarman's picture

Happily no, contractually, yes.

Urban Redneck's picture

Gun "accidents" is SA are at least as prevelant as "boating accidents" at ZH.  There is no shortage of firearms in South Africa.  They choose to bring machetes for a reason, and they're not stupid (savage is a different quesion).

Antifaschistische's picture

NEW WORLD ORDER!!

 

THROW A ROCK..

...GET A RAISE

zoggl's picture

 

District 9 ?

If you haven't seen this movie, it's a mandatory must see: http://youtu.be/pHihFA8q8xI

compare the 2 videos ...

 

xtop23's picture

platinum bounce anyone?

Ratscam's picture

still at a 135 disount to gold, hence a buy. research the rest yourself.

ZDRuX's picture

Point of the story: People don't care how much they make. As long as the guy next to them isn't making more.

john39's picture

all people have a basic sense of fairness...   when it becomes 100% obvious that they are getting screwed, they react...

Azannoth's picture

"all people have a basic sense of fairness" - every time I hear the word "fair" I want to puke, this word had a reasonable meaning long ago now it's a substitute for "from everybody according to their abilities to everybody according to their needs" nothing more

"when it becomes 100% obvious that they are getting screwed, they react" - no when it becomes obvious that their neighbors are fairing better than they are, they react, everybody's completely content as long as everybody else is sitting in the same shit

duo's picture

you heard it here first....NYPD demands 22% pay raise because their job is "as dangerous as mining gold".

Precious's picture

Remember.  Bloomberg says there is no reason for civilians to own guns.

Schmuck Raker's picture

That's so stupid. Guns don't kill people......large sodas kill people.

CPL's picture

It s far worse than understood.  I understand that someone can drown in a tablespoon of liquid.

 

It is my supposition that nursing homes are heavily armed with nana's slurping soup.  Spoons full of liquid chicken broth hate.

 

Simply terrifying. 

bania's picture

PM's might demand a price hike too.

PiratePawpaw's picture

Silver Up $1 thursday, or

Silver up $1 Friday

Either way it ends the week up and pushing $37. We break that next week, then it gets interesting.

SemperFord's picture

Benny I want my 22% on the precious metals I used to have before that unfortunate boating accident!

debtor of last resort's picture

Still got the blues. Internet blues. This time IS different.

Hmm...'s picture

an honest question:

does labor input have a significant impact on the price of precious metals in the commodity markets?

Seems to me that labor is a minimal price input to PMs, but could be wrong.

For instance, if FoxComm workers struck and received a 20% wage increase it would barely change the price of an Ipad/Ipod/Iphone.

SeverinSlade's picture

I would imagine that it does, considering that comparing Apple to say, Barrick Gold is comparing apples to oranges.

FoxConn constructs Apple products in a highly mechanized factory.  Mining metals is extremely labor intensive (i.e. very hard work).  One FoxConn worker can assemble a lot of iPads.  One miner cannot mine a ton of gold by himself.

Just my thoughts, if someone has a more accurate response, go for it.

SmittyinLA's picture

They use a lot of labor in those SA mines, its cost effective to have lots of worker bees as long as they pay for themselves and earn a profit for the company, if the miners got their wildest pay dreams more than half would have to be let go, the other remaining half would require more automation.

My guess is the entire SA mining industry will be downsizing employees and buying more equipment.  

Machines are way cheaper than people, even Africans, when its more profitable for machines the people will be replaced.

ParkAveFlasher's picture

I'm under the impression that you absolutely need men to mine below ground, to clamber over rocks and debris for quick and accurate placing of explosives, to use their eyes and judgement and arms to pick at the rock walls. 

That said, I'm also under the impression that the gold refined and above ground is rather large in volume as compared to supply, thus labor rates, a single factor in the cost to supply new gold, is not as impactful directly - unless of course, you are not supplying at all!

kaiserhoff's picture

Not really.  New supply is still trivial in relation to demand and pretty much all the gold ever mined is still around.  Now finding out WHERE IT IS?...

 

http://www.stockhouse.com/columnists/2012/sept/13/new-gold-standard-just...

 

 

GottaBKiddn's picture

Colonial Mining jobs are supposed to be low-paying, They just are!

Peter Pan's picture

For how long did people think that South African miners would be paid a pittance while Australian mining truck drivers could be paid up to $300K per year?

The wages in South Africa still reflect an ongoing apartheid because no white south African would go down a mine shaft for what is currently paid.

kaiserhoff's picture

I read recently that the minimum wage in Australia is now $15/hr.  Anyone know what that translates into in lifestyle?

Peter Pan's picture

That is still twice the rate of the USA and does not take into account the handouts by government if you have a family.

JohnKozac's picture

Median house price in Sydney is about $600,000.

Median household income there (in NSW) is only $45,000

That's why mortgage defaults are rising there and will intensify as both the resource industry and construction slows down.

My friend there sold his house last year for a whopping $863,000. he had paid only $245,000 for it in 2000. he said he will rent until houses drop back to "normal." Can you guess what he bought at the Perth Mint with all that extra profit?

http://apm.com.au/

https://en.wikipedia.org/wiki/Median_household_income_in_Australia_and_N...

kaiserhoff's picture

Thanks, the numbers mean less all the time without context,  and I'm a friggin CPA.

DosZap's picture

The wages in South Africa still reflect an ongoing apartheid because no white south African would go down a mine shaft for what is currently paid.

 

No it doesn't, all it takes is a set of balls, and they will get some, most of their demands.

The other mines SHOULD up the payscale for similar workers, if they want this to not cascade.

It's been this way, in every country I know of, if you do not meet your comps wages,working conditions, you lose people, and or they strike.

If the other mines want the Upper hand w/lower wages, they should expect to get a shutdown, and losing people to the firms that pay best.

Learned a LONG time ago, if you busted your ass, and deserved a raise, 99% of the time you DID not get one.

YOU had to push the issue, and ASK for one.People(owners/Corporations) do not by nature reward hard work on it's merit, but they damn sure will dump poor performers.

 

Ratscam's picture

+100
learn from the rich people how to save money

Gringo Viejo's picture

I'd like some "equitable treatment" my own damn self.

Abraxas's picture

Greedy miners! Didn't they hear about the austerity and self-sacrifice. We have lots of Milton Friedman's lovers around here to teach them to shut up and dig, because that's how the free-market works. If they have to employ torture and police brutality to set them straight, so be it. It's for their own benefit in the long run. Gotta protect the markets from the people.

Flakmeister's picture

But greed was supposed to be good... maybe Uncle Miltie meant to qualify it as greed is great as long as you are not part of the laboring class....

xtop23's picture

That is incorrect.

In a true free market the mining company would be unable to find miners unless they paid a wage that the market would bear. Assuming they were paying a wage that was insufficient, they would be unable to fill those positions.

I would also equate the application of force closer to slavery than a true free market solution.

 

 

Abraxas's picture

But, where is this free-market you are talking about. It's an idea, a concept, not a real thing. Also it's a terribly misused concept by the same people who pretend they are embracing.

Benjamin Glutton's picture

minimum rage increase bitchez!!!

buzzsaw99's picture

hope they get their $1100/month.