17 July 2013
Living conditions of Lonmin workers show how exploitation and neglect continue on South African platinum mines.
In their seminal 1996 paper, economists Ben Fine and Zavereh Rustomjee coined the phrase ‘Minerals Energy Complex’–a play on America’s ‘military industrial complex’–to emphasise the centrality of mining and energy to the development of inequality in modern South Africa. The interlinked interests of government and white capital in the mining and energy sectors explain, in their view, the path of development South Africa chose in the 20th century. Tragically, this picture has hardly changed since the dawn of democracy, save for white capital being partially replaced by BEE mining moguls. In spite of occasional grumbling from government and unions, the migrant labour system has not been dismantled or made more humane. Working and living conditions for the average miner remain dire and have worsened in certain cases, particularly on platinum mines.
Lonmin’s Marikana Mine lies at the heart of the Western Bushveld Igneous Complex (BIC), an area east of Rustenburg, containing the world’s largest known deposits of platinum. According to Gavin Capps, mining in the area expanded at a staggering annual rate of 67% between 1994 and 2009, allowing the sector to eclipse gold mining’s share of GDP by 2000. The BIC now resembles a city in its own right, with shafts, cooling towers and heavy machinery dominating the skyline. Like most mining houses in South Africa, Lonmin has recently converted its single-sex hostels into family units, owing largely to union and government pressure. While this measure has benefited a few lucky mineworkers and their families, it has forced thousands of workers previously housed in hostel accommodation to build their own shelter on the grasslands around the mines. Sprawling shack settlements now lie scattered across the BIC. A new generation of migrant workers, predominantly recruited from Pondoland, populate these new townships.
One such settlement is Nkaneng, which lies in the shadow of Lonmin’s Rowland Shaft. About the size of the Cape Town CBD, it is a densely populated, haphazard collection of shacks, rubbish and dust, devoid of basic amenities like water and electricity. Lonmin’s high rate of labour turnover means that new workers arrive all the time, most of whom end up building their own shelter on Nkaneng’s southern rim, which expands almost continuously.
The company grants workers who do not dwell in hostel accommodation a R1,700 housing allowance on top of their monthly wage. This is a substantial amount of money, but is unlikely to create significant improvements for the living conditions of ordinary workers, because the areas around mines are devoid of formal housing. The company would do better to invest in more formal housing for its employees, to limit the continuous expansion of Nkaneng. A Lonmin rock-drill operator in the township, who wishes to remain anonymous, claims that the housing allowance makes very little difference to his standard of living. With no prospect of renting decent housing, he sends whatever surplus money he can back to his wife and children in the Eastern Cape, keeping a little extra to spend at local taverns when he gets the chance.
It appears that apart from throwing small amounts of money at the problem, Lonmin has not made any serious attempts to deal with the desperate living conditions of the majority of its workers. Local activist Chris Molebatsi, a member of the Benchmarks Foundation and cofounder of the Marikana Support Committee, argues that Lonmin is ethically obliged to ensure a basic living standard for its employees, but have failed dismally to do so. The company’s woefully inadequate CSR programmes have had no effect on the lives of the inhabitants of Nkaneng. According to Chris, a R35 million farming project financed by Lonmin in 2006 was recently mothballed, but is still claimed by the company as a Corporate Social Responsibility (CSR) project in its official annual reports. This development is in line with Ralph Hamman’s more general conclusions about CSR in the platinum sector, articulated in his 2004 paper Corporate Social Responsibility, Partnerships and Institutional Change. He argues that, in the face of soaring profit margins, platinum mines have been lackadaisical at best in their financing and implementation of CSR programmes. This charge certainly applies to Lonmin, whose neglect of the Nkankeng community raises serious questions about its ethical standing.
A brief examination of Lonmin’s finances illustrates that sustainable development for its employees remains a financially viable option. In 2008, according to its annual accounts, the company recorded earnings of $963 million (about R12 billion at the time) before taxation. This amount has dropped in recent years, to $67 million (about R550 million) in 2012. These figures represent a substantial shift in financial fortunes for the company, and can be explained partially by the tragic events at Marikana last year, labour instability throughout the sector and poor commodity prices. It is clear, however, that in order to quell labour unrest and remain sustainable, Lonmin has to redirect a portion of its capital into sustainable community development, even if profits are low. Even if profits increase in 2013, as a recent editorial in the Mining Weekly predicts, the company’s viability will continue to be at serious risk unless these structural deficiencies in its business model are urgently addressed.
Lonmin’s CEO, Ian Farmer, stood to earn £3.2 million (about R47 million) in the 2012/13 financial year. A fraction of his annual salary, invested responsibly, could make a real difference to the lives of the people of Nkaneng. Similarly, a portion of the company’s profits–unfathomable amounts of money to the average miner, even at their lowest levels –could be set aside for sustainable community development projects, such as the construction of more formal housing. These measures could make a lasting difference to the lives of ordinary Lonmin employess, and improve the long-term viability of the company’s operations.
It is important to note that mining houses do not bear sole responsibility for the destitution of mineworkers in contemporary South Africa. The ineptitude of local government, union incompetence and a myriad other factors undoubtedly contribute to the socials ills that plague places like Nkaneng. It is clear, however, that shrinking profit margins do not absolve mining houses of their responsibility to provide decent living and working conditions to their employees, a task at which Lonmin has failed in recent years. Symbolic of a century of neglect and exploitation in the mining sector, the squalor of Nkaneng and its sister shack settlements makes the recent labour unrest less surprising. I asked a prominent rock-drill operator and strike co-ordinator how he plans to improve the working and living conditions on Lonmin’s mines. He said, “At the moment, we are trusting AMCU to the deliver the goods. It looks like they are doing a much better job than NUM at listening to our grievances. But us workers are biding our time. We need higher wages and better living conditions – and if AMCU doesn’t deliver the goods, we’ll be out toyi-toying on the koppie once again.”
It appears that AMCU is living on borrowed time if they are to succeed in meeting the demands of a deeply angered, militant constituency. If they are to remain relevant, they will have to convince Lonmin to drastically improve the living and working conditions of their employees. As the people of Nkaneng anxiously await the outcome of renewed negotiations, Bhele and his compatriots are readying themselves for a new wave of protests, with the koppie looming large on their horizons.
Raphael Chaskalson is studying for an honours degree in economic history at the University of Cape Town. He works part-time at Habonim Dror and Equal Education.