Unaffordable pay will destroy industry’s future – Motsepe

27th February 2013

By: Martin Creamer

Creamer Media Editor


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JOHANNESBURG ( – The paying of unaffordable wages and salaries will destroy the future of the South African mining industry, African Rainbow Minerals (ARM) executive chairperson Patrice Motsepe has reiterated.

Responding to Mining Weekly Online following ARM’s reporting of 30%-lower earnings in the six months to December 31, Motsepe said that only responsible engagement with labour would allow businesses to continue (see also attached video).

“We’re committed to paying our employees across the board competitive wages and salaries. We want to attract the best and it’s not just about enjoying one’s work but also about getting a very competitive wage and salary.

“But if we’re expected to pay wages in future that are disproportionate in terms of what we can afford, like any other industry in the world, we have no future.

“It’s our duty, on behalf of all our stakeholders, and our shareholders in particular, to engage with labour in a manner that is responsible and allows all of us to run our businesses,” Motsepe added.

JSE-listed diversified ARM’s interim results were negatively impacted by the fall in realised dollar prices for iron-ore coupled with above-inflation unit cost increases at some operations, which were partially offset by increased sales volumes for nickel, iron-ore, thermal coal and platinum-group metals.

In January, Motsepe took a decision to give half of his wealth to South Africa’s poor.

ARM CEO Mike Schmidt told Mining Weekly Online that ARM’s dominant labour union at mine level was the National Union of Workers (NUM), with whom the company had a long-standing, mature relationship.

However, at the company’s lowest-cost Two Rivers platinum mine, the new emerging union, the Association of Mineworkers and Construction Union (AMCU) was the majority union.

At the company’s smelter operations, the main union was the National Union of Metal Workers of South Africa.

“By a small majority today, AMCU is the representative union at Two Rivers.

“It went through its turmoil, but we managed those relationship. They are our employees and we respect them,” Schmidt said.

Two Rivers once again delivered excellent results, with plant recoveries now at the mid-80% level from 72% previously, and even further efficiencies were expected.

By contrast, the NUM-represented Modikwa platinum mine had been less successful, with a further R102-million in capital having to be injected into the operation that is still striving to achieve steady state.

Edited by Creamer Media Reporter


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