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Striking mine workers in South Africa
Image: Reuters/Siphiwe Sibeko

South African platinum dispute

Asumpta Lattus
June 13, 2014

South African miners and platinum companies were near to an agreement on Friday to end the longest strike in the country's history.


The five month old dispute has cost producers billions of dollars and helped to push the country close to a recession.The Association of Mineworkers and Construction Union (AMCU) was demanding an entry level wage of about $1,200 (887 euros), double what the miners currently earn.

DW: The union says they have accepted a new wage offer in principle. What has still to be settled?

Patrick Bond: This is the stage where they are just putting all the final dots and crosses on their contract. There are always with these mining houses exceptionally tricky phrasings that have to be worked out, because two years ago, when settling the strike right after the Marikana massacre in September 2012, Joseph Mathunjwa, the main negotiator for AMCU - the Association for Mineworkers and Construction Union - thought he was getting a 22 percent increase, but the tricky way in which the contracts were arranged meant that at the end of the day it was closer to ten percent. He's now claiming a 20 percent increase. Although it falls very far short of the demand for 12,500 rand ($1200) per month, it is still a very, very impressive increase, but the workers have been on strike for five months and they have lost about a billion dollars in wages and they'll never win those back, unless huge increases take place in the future. The critical point about this strike, though, is that it was settled with Mathunjwa agreeing for the next three years that there won't be any more strikes in the platinum sector.

Patrick Bond Südafrika Experte
Patrick Bond: 'very, very impressive increase'Image: Patrick Bond

Is this a true victory over the mining company?

Well, it's difficult because the mining houses had something that the workers probably didn't estimate when they went on strike in January, they had a huge stockpile. Although there was about 23 billion rand worth of revenue that was lost by the mining houses, according to business analysts, I think they did rather well. The mining sector has had very high profit rates recently. There's pressure from shareholders to keep them very high, in the 15 percent range, and the platinum price did improve quite a lot during the strike. So my gut feeling is that if you look at the last five months, workers lost the most and the companies had this big stockpile. However, it's a great tribute to the workers that they weren't broken. The money lenders, the loan sharks, were really putting pressure on the workers to settle because they had outstanding debts and it's going to be a tough time to scrape back their standard of living even with the 20 percent increase.

Could this deal set new working standards in the mining industry?

Well, this is the next question - whether it will be like in September 2012 after the last big strike - including the Marikana massacre of 34 workers in August 2012 - and after the reported 22 percent increase, it led to a sort of prairie fire of wildcat strikes across the country. The metalworkers had a huge auto facility - Toyota in Durban - go out on strike. The vineyards and the fields where farm workers were underpaid, they got an increase of 59 percent. That was the sort of milieu about two years ago. And this is the big question. With mineworkers in the gold sector now thinking about going on strike and with the metalworkers more or less promising there will be a strike of 220,000 workers in engineering and metal sectors, starting on July 1, it may well be a hot winter again for labor.

How badly has the strike affected the South African economy?

The country went into what will probably be determined as a recession - two quarters of negative growth. This is a section of the country, the platinum belt, where we have 80 percent of the world's platinum and the area just to the west of the capital Pretoria has been extremely tense. South Africa has been recorded as having the most militant working class in the world by the World Economic Forum's Global Competitiveness Report for the last two years - out of 148 countries. It is still a society where foreign investors had better beware if they're coming with the intention of ripping out platinum extra cheap and not paying these workers very much - they'll be in for quite a class struggle.

Patrick Bond is a political economist at the University of Kwazulu-Natal, South Africa

Interviewer: Asumpta Lattus

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