South Africa mine killings raise tensions

By Crystal Orderson in Cape Town
Posted on Tuesday, 7 June 2016 12:55

The National of Mineworkers Union (NUM) on Monday held an urgent meeting with the police to discuss the killings at the Northam, Zondereinde mine in Limpopo province over the past year. Some of the murders have been blamed on clashes between rival trade unions.

Last year was undoubtedly challenging for the mining sector

NUM and the police met as the mine owners suspended production after a miner died during clashes with the rival Association of Mineworkers and Construction Union (AMCU). Another miner had been killed on Sunday. Workers have vowed not to return to work until their safety is guaranteed.

Northam Platinum mine chief executive officer Paul Dunne told the South African Broadcasting Corporation that the situation at the mine remained tense. He said the specialist police investigating unit, the Hawks was now investigating the killings.

Provincial police spokeswoman Colonel Ronel Otto said the Monday clashes where an Amcu member was stabbed to death were linked to the previous day’s killing.

NUM said it would hold more meetings with the police and Northam management on Tuesday to discuss the killing of six of its members. “We call on Northam platinum and the police to expedite the arrest of whoever is responsible for these acts,” NUM tweeted.

The Zondereinde mine produces about 300 000 ounces of platinum a year, according to Northam’s website, and accounts for about 70 percent of the company’s revenue. South Africa is the world’s top producer of the precious metal used for catalytic converters in automobiles.

The platinum mining sector has been battling a drop in global commodity prices and soaring a cost, which now threatens thousands of jobs.

In February, Mineral Resources minister Mosebenzi Zwane said 32,000 jobs in the mining sector were under threat.

South Africa’s platinum belt has long been a battle ground for rival unions in the mining sector and the latest killing have heightened concern over potential outbreaks of violence.

NUM was once the country’s largest union in the mining sector but AMCU has since increased its support. But its membership has dropped from about 310,000 in 2012 to a current 230,798.

Meanwhile, a report by a leading audit firm has revealed a first ever collective net loss of $$27bn for the top 40 miners in South Africa with their market capitalisation falling by 37 percent, effectively wiping out all the gains made during the commodity super cycle.

PwC Africa’s mining industry leader Michal Kotzé, Mining said the leading miners were now saddled with more debt. “Last year was undoubtedly challenging for the mining sector,” he said.

“The Top 40 experienced their first ever collective net loss, their lowest return on capital employed, a significant drop in market capitalisation, and an overall decline in liquidity with the result that the Top 40 were more vulnerable and carrying heavier debt loads than in prior years.”

Kotze said they were also seeing shareholders persist with a short term focus, impacting the capital available for investment and, as a result, constraining options for growth.

“But this is a hardy industry, and while many miners may be down they are certainly not out,” he added.

The report analysed 40 of the largest listed mining companies by market capitalisation.

Understand Africa's tomorrow... today

We believe that Africa is poorly represented, and badly under-estimated. Beyond the vast opportunity manifest in African markets, we highlight people who make a difference; leaders turning the tide, youth driving change, and an indefatigable business community. That is what we believe will change the continent, and that is what we report on. With hard-hitting investigations, innovative analysis and deep dives into countries and sectors, The Africa Report delivers the insight you need.

View subscription options