South Africa’s ruling party, the African National Congress (ANC), will bear the brunt of a poor-performing platinum-group metals (PGMs) sector, as the country gears up for its fifth democratic elections, pan-African advisory firm Africapractice associate consultant Sinethemba Zonke tells Mining Weekly.

Zonke says opposition parties will use the sector’s failures to discredit the ANC-led government in its election campaign, especially considering that the PGMs sector is a key contributor to the economy and one of the foremost employment creators in the country.

“Events in the platinum sector will have a negative impact on the image of the ANC. Government and the ruling party were key targets of criticism during developments at Marikana and its aftermath,” he explains.

The tragedy, which occurred on August 16, 2012, resulted in the deaths of 34 mineworkers, with another 78 mineworkers injured. A total of 44 people were killed during the nearly two-month-long unprotected strike, including union officials and security personnel.

“As a result of these types of incidents, it is likely that the ANC will try to steer clear of discussions around developments in the platinum belt during its election campaign. However, this may enable opportunist parties, such as the Economic Freedom Fighters, to take up these issues on behalf of mineworkers,” he elaborates.

Meanwhile, Creamer Media’s Research Channel Africa reports that, in 2013, South Africa’s PGMs sector was again characterised by safety stoppages, mine closures and widespread industrial action, owing to several factors, including production-cost pressures, negative market conditions, strained capital expenditure, softening PGM prices, weak demand and declining output.

Over the course of 2013 – and in the wake of the Marikana tragedy – Mining Weekly has been reporting on government’s strides to intervene and stabilise the mining industry.

In July 2013, government formed a mining task team – comprising mining unions and the Chamber of Mines and spearheaded by Deputy President Kgalema Motlanthe – which aims to resolve the challenges faced by the industry.

The team drafted the Framework Agreement for a Sustainable Mining Industry, which aims to mitigate the industry’s problems and which all stakeholders, except the Association of Mineworkers and Construction Union (AMCU), signed.

However, ANC deputy president Cyril Ramaphosa’s alleged personal involvement in the Marikana mine massacre remains a cloud over the ANC’s head, adds Zonke.

“Ramaphosa was a key figure who stood out in the Marikana aftermath and has remained in the spotlight as the cause of the tragedy, which is being investigated by the Farlam Commission,” he notes.

The commission resumed its duties earlier this month after the December recess.

Meanwhile, the ANC-affiliated union in the mining industry, the National Union of Mineworkers (NUM), has continued to lose members to newcomer AMCU.

Zonke tells Mining Weekly that the unhealthy relationship between the NUM and AMCU – which originated as a breakaway movement from the NUM – is at the centre of the PGMs sector’s high wage-increase demands.

“The battle between the two unions was a key factor influencing the recent strike at Northam Platinum, for instance. The NUM has been struggling for membership in the platinum sector since the advent of AMCU in 2012,” he explains. Zonke asserts that the NUM’s resilience at Northam Platinum’s Zondereinde platinum mine in Mokopane, Limpopo – where workers were recently on strike for 11 weeks from November 3 – was an attempt by the NUM to redeem its reputation and win back members from AMCU. “While there remains several significant issues of concern in the mining sector, one can argue that there was a genuine demand for a wage hike and the improvement of mineworker living conditions at Zondereinde mine. “The union was feeling the pressure and needed to provide a deal that would beat any deal that AMCU could negotiate. The Northam strike presented an opportunity for the NUM to get ahead of AMCU in the fight for union membership,” he elaborates. On January 17, the NUM accepted Northam Platinum’s revised two-year wage offer, which comprised a 9.5% wage increase for core, and an 8.5% increase for noncore category 2 to 8 employees, and a 9% living-out allowance increase. Zonke believes that the success and failure of the NUM’s demands will have a ripple effect on AMCU, which was granted permission by the Commission for Conciliation, Mediation and Arbitration to have protected strikes at the country’s largest platinum producers, including Anglo American Platinum, Impala Platinum and Lonmin. Zonke also mentions that the ongoing rivalry and subsequent strikes are affecting investor confidence and negatively impacting on the country’s economy. “Labour unrest and sluggish production impacted on the growth rate in 2013, which resulted in the International Monetary Fund and the South African Reserve Bank predicting downward growth. Further, the unions’ demands for double-digit wage increases are making the sector less attractive to investors,” concludes Zonke.