By Leonard Gentle · 22 Jan 2013
How soon we forget…When the striking workers were killed by the police at Marikana there was a universal sense of shock and horror. How could it have come to this? Just 18 years after apartheid and here we go again - the police mowing down demonstrators. Now AngloPlat has announced that it will retrench 14 000 workers and the mood amongst the commentariat is, “Well, what did they expect?”
Angloplat’s announcement seems to confirm our most dismal perceptions that the markets will ultimately have their way and we must all behave accordingly. But beyond this myth, a much larger battle for public opinion is being waged over the post-Marikana strike wave. Either we see this as a movement that inspires us to expand the notion of democracy and citizenship or we join the ANC-alliance and big business in their chortling at striking workers receiving their comeuppance.
From the side of the ANC government the talk of revoking mining licences for companies like AngloPlat is just that – talk. It’s the talk of a party that has lost moral authority amongst mine workers.
From the side of the business media this is the latest verse in a constant refrain. The media see the task of the fourth estate less as exposing the lack of government accountability and more as a warning bell for skittish investors -- the proverbial boy who cried wolf.
We are always told that the government is acting to scare off investors. Last year it was Malema and the N-word, “nationalisation”; now that he’s been dumped and the ghost of nationalisation exorcised at Mangaung, its Susan Shabangu having the temerity to chastise AngloPlat for not giving the state due notice.
One would think that having a weakened, imploding labour movement would have them spilling champagne all over the boardroom floors, especially in the Chamber of Mines and the associated mining companies in platinum and coal. But the decline of COSATU and the National Union of Mineworkers (NUM) is not coming about in the context of a defeat of the working class or a rout of its militant force.
No, this decline comes in the context of a rising tide of militancy amongst the working class - a class that is passing COSATU, NUM and their alliance partners by. And with no NUM to speak to, mining companies don’t have what the Israeli’s call a “credible negotiating partner”.
This has enormous consequences for the industry. But first let us dwell for a moment on the economic arguments presented.
AngloPlat has cited “weakened demand” and “soaring costs” for its serving notice that it would mothball four shafts and sell off Union mine. The weakened demand apparently relates to the declining European demand for catalytic converters as Europe continues its ongoing economic decline. “Soaring costs” has immediately been latched onto as code for the wage demands made by workers in the post-Marikana strike wave.
But some things don’t add up. As someone once said, “The first casualty of war is the truth.”
Firstly, in the neo-liberal era, corporate decision making is made less for reasons of operational profit and more to ensure that the share price is favourable in a world of rapid-flow money capital -- what has come to be called realising “shareholder value”. Financialised corporations seek to attract trade in their stocks by projecting themselves as ever more focussed and able to anticipate future market trends. Investors are encouraged to buy now, cheaply, and then ride the wave of a higher share price tomorrow. Significantly when AngloPlat released its business review on 15 January its share price fell by some 3.4% on the JSE, but when it announced its planned retrenchment its share price recovered by the end of the same day.
When South Africa’s (SA’s) monopolies shifted offshore in the mid-1990s to join this shareholder value movement, they restructured to position themselves favourably to invite good returns on equity by being “focussed”. Nothing epitomised this more than SA’s largest behemoth and AngloPlat’s parent, the Anglo American Corporation, which used to dominate all sectors of the South African economy.
The old Anglo strategy was to have such a diverse range of investment portfolios in mining, banking, manufacture, retail and hospitality that it could realise operational profits at any stage of the business cycle. But when it restructured on joining the global shareholder value movement, it unbundled and jettisoned its manufacturing and retail sectors while substantially reducing its bank interests to focus on mining.
This, despite 15 years of talk in post-apartheid SA of the dire investment climate in mining -- from state control of mining rights, to BEE charters, to all the rhetoric of declining mines and high costs. Overriding all of this has been the resources boom, as China’s irresistible ascendancy drove demand and prices upwards. With the perception that this will be ongoing, Anglo’s strategy has been well rewarded. Today Anglo American is largely an investment vehicle for mining and its chief contribution to profits comes from SA.
Secondly, this notion of skittish investors that are so sensitive to “uncertainty” is the stuff of media fiction. To be sure the neo-liberal globalisation period has ushered in the highly mobile movement of money capital into derivatives and money markets. But in the current period of cheap dollars flooded by the US’ rounds of quantitative easing, coupled with high real interest rates in SA and the crisis in Europe and the US, money is flowing into SA and other “emerging economies” notwithstanding the post-Marikana strike wave.
And as regards investment in fixed resources like mining, this is not a mobile form of capital at all. Capitalists can’t shift production elsewhere like clothing or appliances. Mines also require relatively long lead times to generate operational profits on fixed investment. So mining investment is not so much about the current set of market conditions - the downturn in European catalytic demand, for instance - but what is seen as the demand over a longer-term cycle. This is about the growing demand from China and India.
Moreover, SA is the worlds’ biggest holder of platinum reserves -- some 80%. The platinum price, like the gold price, continues to be driven up at around record prices globally priced in dollars whilst the South African producers make their money in Rands, which means they earn extra Rand dividends. The returns on their investments are simply too tempting. No capitalist runs away from such a favourable scenario. In fact Business Day (18 January) reports on expansion plans in the case of Anglo American, AngloPlat’s parent.
And, assuming that there was a genuine idea of disinvestment from South African mining, where would they go?
Mining alternatives in other resource-rich countries are not so favourable. Russia has its oligarchs dominating investment; Australia has enacted a mining super tax, whilst in Latin American countries like Chile, Brazil and Argentina, governments are invoking legislation to protect strategic minerals from foreign investors (one of the things that cost Cynthia Carroll her job at Anglo was her unfulfilled faith in Minas-Rio in Brazil).
Thirdly, there is the oft-repeated fiction that workers’ demands will simply lead to the mining sector increasing mechanisation. The argument is that overpaid workers will simply make the company bring in high-tech machines and rationalise. But this flies in the face of the nature of mining in SA. Gold mining and platinum mining are deep-level mining. We are not Australia where huge industrial excavators and trucks can simply load up ore from opencast mines. No, South African gold mines are up to 4km deep where workers toil in shafts with pneumatic drills. Any new technological innovation that could operate successfully at such levels would only be viable if it could cheapen production in comparison with this.
What the Lonmin experience showed everyone is that one of the most profitable platinum mines in the world used migrant workers as rock-drillers employed through a labour broker, and where workers lived in shacks near the mine. This is not the world of high-tech mechanisation. The nature of deep level mining for profit militates against this. The profit motive means that employing cheap labour is still South Africa’s competitive edge. No, the talk of replacing workers with machines in SA mining is simply that: talk.
If this is not about “blind market forces” and AngloPlat is not merely bluffing then what is AngoPlat really doing? And why is this an important question for all of us in the struggle for democracy?
Since Marikana the biggest thing that has changed has been the absolute decline of COSATU and its affiliates as a representative force amongst the leading layers of the working class. In particular its largest affiliate, the NUM, has been thoroughly discredited as a corrupt, sweetheart union with grubby fingers in banks, investment funds and real estate.
COSATU’s crisis of legitimacy has enormous political implications for all of the elite in SA. Along with this go all the structures and forums of the industrial relations and labour market systems – the LRA, the sector education training authorities (SETAs), the Bargaining Councils and the famed tripartite chamber, the National Economic Development and Labour Council (NEDLAC). It is also a crisis for the ruling ANC.
Since 1994, the ANC could use its liberation credentials to get the votes of the poor whilst implementing the anti-poor neo-liberal policies of its global counterparts. But these liberation credentials needed bolstering by a force within civil society, which could articulate the anger and disappointment of millions of ordinary people whilst convincing its membership that they needed to channel that anger into strengthening the ANC. With the able leadership of the Communist Party ideologues providing the intellectual weapons to make this Janus-faced role seem profound, this delivered for the ANC time and time again.
But for that role, COSATU had to be a significant organised force capable of speaking on behalf of the broader working class. Marikana has exploded all that.
So there is a serious thing happening here, but it is not about some genuine disinvestment or downsizing for economic reasons. No, the company is acting as the vanguard of the industry. What in naval terms is called firing a broadside across the bows. With NUM discredited as a negotiation partner, there is a huge vacuum that cannot be left unfilled. The bosses know that they now have to deal with radical unknowns – like the Strike Committees that represented workers throughout the strike wave of 2012. They have to deal with unions such as the Association of Mineworkers and Construction Union (AMCU) that was not recognised until recently. They face the uncertainty of workers abandoning NUM in droves but without clarity as to where they will go.
In the gold sector they have centralised bargaining where the Chamber of Mines sits down with the NUM and the old white union, Solidarity, and for a while they can hope that deals struck there can simply be imposed on all workers.
But this is not the case with the platinum sector. So, they have to attempt to crush the new unbridled militancy and they have to do so soon.
AngloPlat is firing that first salvo and it is doing so as the whole industry watches to see what happens next and how the workers will respond. So far NUM has responded on cue saying, “We told you so…See what happens if you don’t listen to us!” (in so doing it merely confirms its disgraceful demise). And the business media also does its job, uncritically taking AngloPlat at its word and acting as a conduit for spreading panic.
But although this is a propaganda war it doesn’t mean that the stakes are not high or that workers can’t be dealt with ruthlessly. Companies are notorious for using what they call “restructuring” as a device to discipline workers, by dismissing them and then employing new recruits from the unemployed, hoping that these will be more conciliatory and docile.
At the end of 2012, AngloGold also served notice that it intended to dismiss 14 000 workers (why are these figures suspiciously the same?). But they couldn’t go ahead because the Strike Committee stood firm and the company couldn’t employ replacement labour.
So the key to the outcome of AngloPlat's salvo, whether a propaganda bluff or a serious attempt at restructuring, will lie not with government, nor NUM or COSATU, nor an “industry-saving forum” of economists, trade unionists and policy-makers, but with the workers who drove the struggles last year, with the Strike Committees and their links with their community counterparts in the townships in the North West and Gauteng.
In short, this is a struggle for political power in the industry and the stakes are high. Those of us who are interested in democracy and social justice should not be climbing onto the alarmist economic bandwagon, but ask what tactics and strategy the fledging self-organising of the workers, such as the Strike Committees, can employ to take this battle for a better life forward.