Mothers have no food to give to their children in the troubled platinum belt where the strike is entering its eleventh week at an R11-billion loss to platinum companies and a R5-billion loss to platinum workers, Lonmin CEO Ben Magara said last week.

Some 0.42% of South Africa’s R2.65-trillion gross domestic product is already down the drain as a result of the legal but highly damaging strike that has already seen 20% lopped off yearly earnings of workers, who lose 2% of their salary for every week that they are not at work.

“It’s not just that economic activity is down but it’s actually that people are hungry. It’s great for us in the boardrooms, but just imagine that poor lady with kids with no food to put on the table. It’s real and it’s happening as we speak right now,” Magara told a media roundtable a day after the Lonmin executive conducted an intensive tour of the stricken Rustenburg platinum belt.

For Lonmin, the platinum ounces remain in the ground and will be mined at some stage, but for workers close to retirement, the lost pay is gone forever.

But that did not stop the rampant but outwardly disciplined Association of Mineworkers and Construction Union (AMCU) marching on Lonmin’s offices to reiterate its demand for R12 500 a month as a minimum entry-level wage.

“This industry cannot afford AMCU’s demands. They would drastically reduce jobs and decimate communities,” said Magara, a former underground miner and engineering honours graduate, who has been running the London- and Johannesburg-listed Lonmin since July last year.

Lonmin’s 4%-above-inflation wage offer, which AMCU has spurned, is higher than what employees would earn doing similar work in any other sector of the South African economy.

Lomin executives have visited employees and the company has established a call centre in Marikana for employees to engage with it on toll-free lines and has invited all and sundry to assist, including traditional leaders.

Lonmin executive VP Lerato Molebatsi told the media roundtable that SMS and automated voice messaging (AVM) questions sent to employee cellphone numbers indicated that the overwhelming majority of employees wanted to return to work.

AVMs to 20 000 of 23 000 workers in lower work categories three to nine indicated that 67% wanted to return to work and 6 500 SMS responses gave the reason for staying away from work as fear of violence.

“The reality is that our employees are telling us that they are being intimidated, but we don’t know who is doing the intimidating,” Magara said.

The National Union of Mineworkers (NUM) last week condemned attacks on its members in the platinum belt, where more violence surfaced, with one nonstriking mineworker being attacked at his home and another having his car set alight in the early hours of the morning in villages near Rustenburg, where North West police are investigating cases of attempted murder, arson and malicious damage to property.

NUM called on the signatories of the Framework Agreement, drawn up by the who’s who of South African mining, but not signed by AMCU, to condemn what the union described as a “savage onslaught”.

“These attacks on our members have the potential to render the spirit and letter of the agreement valueless,” said the NUM, which urged the law enforcement agencies to clamp down on the perpetrators.

Congress of South African Trade Unions provincial secretary Solly Phetoe said in a media release that the antiviolence Framework Agreement was failing and expressed concern about “people killing each other”.

Magara said the emphasis of strike analysis on economic loss, the need for legal reform and the search for mechanised mining solutions were unhelpful until the immediate social instability and poverty risk were removed.

He said R88-million was being lost a day in wages, R67-million a day remained unspent on goods and services, R33-million a day was not invested in capital projects, half of which would normally go to labour, and government was being deprived of R7-million a day in taxes and royalties.

Worse still were the increasing concerns of investors and customers, who were finding South Africa an increasingly unreliable source of platinum.

Lonmin, like Anglo American Platinum (Amplats) and Implats, have issued force majeure notices to many suppliers, saying they would not be able to meet their contractual obligations owing to circumstances beyond their control – but at this stage, none has issued force majeure notices to customers, which indicates continued across-the-board platinum supply to users, despite the prolonged strike.

Some 70 000 AMCU members who went on strike at Amplats, Implats and Lonmin mines, in Rustenburg, on January 23, have since rejected the wage increase of up to 9% offered by the companies.

Amplats, Implats and Lonmin, in turn, rejected AMCU’s revised demand that the R12500 could be achieved over four years, saying it was still unaffordable at some 30% uplift yearly.

Bloomberg reports that the platinum strike is crippling business in Rustenburg, where “everyone’s pawning, but nobody is fetching”.

Platinum mining, which began 90 years ago, has boosted the Rustenburg economy to the point where the town became one of South Africa’s fastest-growing cities, with more than 500 000 people.

Half the jobs and most of the economy are platinum-mining linked.

Supply disruptions and news that the top three producers might source metal from third parties would place a big cost burden on producers and have the impact of lifting prices higher in the absence of greater production.

Lonmin VP Mark Munroe told Mining Weekly that roadshows that the company’s executives had undertaken in the platinum belt showed that the suffering caused by the strike was huge.

“Husbands are on strike, spouses are on strike, children are without food, and the ripple effect is significant,” he added.