S. Africa’s Ramaphosa Says Union Rivalry Is Root of Unrest

Union rivalry is the main source of instability at South African mines and labor groups should work with companies to resolve disputes, said Cyril Ramaphosa, the deputy president of the ruling African National Congress.

At Lonmin Plc, members of the Association of Mineworkers and Construction Union, which represents the most miners at the company, held a two-day strike demanding the closure of a smaller organization’s office at the Marikana operation. Anglo American Platinum Ltd. employees threatened to strike over its proposal to cut as many as 6,000 jobs as part of a plan to return to profitability.

Ramaphosa has “full confidence” in the departments of mineral resources and labor, which are acting “behind the scenes” to resolve the disputes, he said on Johannesburg-based Talk Radio 702. The “situation is quite volatile,” he said.

Ramaphosa, who founded the National Union of Mineworkers in 1982 and went on to lead the biggest strike in the gold industry five years later, is now the richest black South African after Patrice Motsepe, according to the Johannesburg-based Sunday Times. The NUM used to be the biggest representative of employees at platinum mines.

Mines owned by Amplats, as the Johannesburg-based unit of Anglo American Plc is known, are running as usual after a group of workers threatened to strike if the world’s biggest producer of the metal refuses to drop proposals to cut as many as 6,000 jobs, spokeswoman Mpumi Sithole said by phone.

Informal Talks

The company last week pared back plans to cut as many as 14,000 jobs announced on Jan. 15 as it seeks to return to profit. While leaders of unions representing about three-quarters of Amplats workers have asked employees not to strike, some miners have said they will stay away should the company not abandon the job cuts.

Amplats, unions and government are holding informal talks that may result in fewer job cuts, Franz Stehring, the UASA union’s divisional head for mining, said by phone.

“It’s very positive in terms of more jobs saved,” Stehring said. “We can’t strike because it would be illegal and disrupt the process.”

Producers in South Africa, which has the biggest known reserves of platinum, are struggling with higher costs as strikes drive above-inflation wage increases at a time of waning platinum demand. Mining companies and the government are trying to resolve disputes between unions to restore confidence in the industry and help operations return to profit.The AMCU is the biggest representative of Amplats workers at 41 percent.

No Strike

“We have said time and again that we as AMCU haven’t called any strike at Anglo American Platinum and we are not intending to do so if the strike is illegal,” Treasurer Jimmy Gama said by phone. “We will do everything possible within the ambit of the Labour Relations Act to protect job losses for our members.”

Evans Ramokga, an AMCU member, told Johannesburg-based SAFM radio that a group of workers at a Khomanani mine, one of three that Amplats may close as part of its restructuring plan, will strike if the company doesn’t find an alternative to job losses. Ramokga said he was representing a group of employees that’s not recognized in labor structures.

Any worker representative speaking as an individual “doesn’t reflect the views of AMCU,” Gama said. Disciplining members is a decision of the national executive committee, which will look at the “intent that member has made in putting the name of the organization into disrepute,” he said.

Can’t Join

Amplats Chief Executive Officer Chris Griffith on May 10 said the company would take the revised plan to unions, and expects to conclude consultations in two to three months.

“We expect a report today,” Gama said.

The National Union of Mineworkers, which has fallen from being the largest employee representative at Amplats and now has about 35 percent of the workforce, said a committee of workers at the company asked it to support a wildcat strike. Such committees at Amplats and other mining companies consist of both union members and staff who aren’t affiliated to labor groups.

“They have asked us to join, but we can’t do something like that,” NUM spokesman Lesiba Seshoka said by phone yesterday.

Workers in South Africa may strike legally, with their jobs protected, if an independent mediator agrees to a stoppage and after talks between unions and companies fail.

‘Economy Standstill’

The AMCU is writing a “last letter” to President Jacob Zuma’s office seeking a meeting to talk about the situation in Rustenburg, Reuters reported, citing the union’s president, Joseph Mathunjwa. The union “will bring the economy to a standstill,” it said.

Amplats advanced for the first day in six in Johannesburg trading, climbing 1.2 percent to 289.34 rand by the close after reaching the lowest since August 2005 yesterday. The rand slipped 0.8 percent to 9.3988 per dollar, the weakest level in four years.

At the company’s Tumela mine in the northernmost Limpopo province, workers who had refused to go above ground returned to the surface by last night and were checked by medical staff, Sithole said. Production was unaffected, she said.

Before it's here, it's on the Bloomberg Terminal.