Representing 70,000 workers, the Association of Mineworkers and Construction Union is the largest union for Implats, Amplats and Lonmin, the three producers that account for more than half of the world's platinum production. It owes its rise to prominence partly to timing and partly to tactics. It started as a splinter group composed of disgruntled members of the National Union of Mineworkers, which was seen as ill-suited to deliver their demands. It has since drawn more members steadily, but it became a majority union after the 2012 platinum strikes. What has attracted many members is its use of highly disruptive activities, including some illegal tactics such blocking mine operations, intimidating non-striking employees and staging violent demonstrations, to force the capitulation of the mining companies. This penchant for agitation only added to its popularity and its effectiveness.
However, its popularity could be short-lived. In the current round of negotiations, the National Union of Mineworkers, despite its own protest, has produced a wage agreement that is amenable to its workers and their employers through a much more passive tactic: compromise. After the violence of the 2012 wage negotiations, which saw dozens killed at the Marikana facility, and the subsequent suspension of operations, mining companies are more interested in negotiating with less hard-line unions.
But companies may not even be able to accommodate a group as aggressive as the Association of Mineworkers and Construction Union, even if they wanted to. The Association of Mineworkers and Construction Union has made some extraordinary demands, including doubling wages for some classes of miners, and it has already shut down operations at some mining facilities to improve its bargaining position. Several factors — from low global platinum prices to platinum recycling to rising energy, labor and operating costs — make reaching a wage agreement difficult, but shutdowns further threaten profitability. So long as the price of platinum remains low, companies will find it difficult to accommodate the union. Moreover, they will not be interested in setting the precedent that encourages unions to shut down operations for extended periods of time to get their way.
Mounting Pressure
Notably, the platinum mining sector is much easier for the Association of Mineworkers and Construction Union to exploit than other mining sectors. Its main source of membership works in the platinum industry; the union represents fewer workers in the gold and coal mining sectors.
More important, the gold and coal industries differ markedly. In these industries, wage negotiations usually lead to tamer disruptions. They have more formal collective bargaining processes through the Chamber of Mines; negotiations in the platinum sector are relatively uncoordinated. Gold and coal mining companies depend on a smaller and better paid local workforce, while platinum producers use a larger, comparatively underpaid workforce that travels from other parts of South Africa — much like apartheid's "migrant labor system." These differences make the platinum sector's bargaining process much more vulnerable to manipulation.
But the pressure is mounting for an agreement. Association of Mineworkers and Construction Union workers have not been paid in six weeks. Disgruntled members reportedly have left for rival unions such as the National Union of Mineworkers and the newly established Workers' Association Union, which could capitalize on prolonged strikes if the Association of Mineworkers and Construction Union fails to secure a better deal than the one the National Union of Mineworkers already put forth.
In addition, mining companies have sacrificed the prospect of stable negotiations by taking legal action. They have sought the arrest of Association of Mineworkers and Construction Union representatives who have participated in illegal activities, and they have begun suing for compensation for money lost as a result of illegal activities. The companies are trying to force union leaders to respond to legal action, thereby draining the union's financial resources.
Protest Culture
Though South Africa's protest culture has been well-documented, the rise of a hard-line group such as the Association of Mineworkers and Construction Union (and the violence that surrounds its activities) has concerned potential investors. Of course, the country is responsible for roughly 70 percent of the world's platinum mining, so the negotiations may be somewhat insulated from investor trepidation. However, companies may not be able to outlast the current strikes. According to current estimates, the three major producers, Implats, Amplats and Lonmin, could guarantee exports for another 2-4 weeks before running out of supplies. Dwindling stockpiles aside, large, protracted strikes can also delay the resumption of mining operations once they are over. (Safety in certain shafts that have not been supported or worked in cannot be guaranteed, and damage done by strikers to equipment such as fans may lead to gas concentrations.)
Both sides are constrained in how long they can allow protests to continue. Unions can lose money and members, and companies cannot offer the higher wages that are demanded of them. However, there are some potential long-term ramifications, too. Existing platinum mining is labor-intensive, not capital-intensive. Mining shafts are so narrow that they usually preclude the use of mechanized extraction. As labor costs continue to soar, labor-intensive mines could shut down as new projects are built using more equipment and less labor.
It is unclear how the current labor negotiations will end. What is clear is that defections from the Association of Mineworkers and Construction Union could have a stabilizing effect on them. Due to South Africa's strike culture and socio-economic inequality, strikes can be expected to persist seasonally, but the constraints on the Association of Mineworkers and Construction Union could moderate strikes in the years to come.
