The fallout over the prolonged strike at Sibanye-Stillwater is intensifying, with the company threatening legal action should mineral resources minister Gwede Mantashe see through a threat to cancel the gold miner’s mining licence if there is no resolution soon.
Sibanye hit back on Friday after Mantashe hinted in parliament on Thursday that he could cancel the company’s mining rights over the persisting strike.
Spokesperson James Wellsted told Business Times on Friday that Mantashe’s comments were “perplexing”. He said the miner reserved the right to protect the interests of its stakeholders through appropriate legal channels.
“The minister’s remark is somewhat perplexing given that it was the unions who initially called the strike which has halted production at our SA gold operations and have dragged out this extended industrial action,” Wellsted said
Wellsted said Sibanye would engage the department of mineral resources & energy if the prospect of cancellation of mining rights was formally raised with the company.
He said labour’s demands would affect the sustainability and life of the company’s SA gold operations, resulting in early job losses for many of its 31,000 employees, and have significant consequences for other stakeholders, including communities and local SMEs that depend on Sibanye’s operations. The move would also affect the national and regional economies.
“The reason we are holding out is that the industry cannot continue to absorb above-inflation costs. Is the minister suggesting that unless we accept the union’s demands [he] may take away our mining right? I’m not sure that is the intention of section 47 — or even lawful — and the implications for inward investment for South Africa are appalling,” Wellsted added.
The act requires the holder of a mining right to actively conduct mining
Business Day reported that Mantashe told MPs on Thursday that through section 47 of the Mineral & Petroleum Resources Development Act (MPRDA) the minister was empowered to suspend or cancel mining rights if the company in question “is no longer engaged in gold mining activities”. The act requires the holder of a mining right to actively conduct mining.
Mantashe referred to a comment by Sibanye CEO Neal Froneman that the company had enough money to run the strike for years.
“In other words, the message he is sending to us is that he is not ready to actually mine gold. He has enough money to fight a strike and stop production for years and years.
“And that actually sends us a message that says the department, relevant officials, [must] look into the possibility of the application of section 47,” Mantashe was reported to have said.
However, a mining analyst who asked not to be named said while section 47 does empower the minister to cancel mining rights, it does not apply in Sibanye’s case because production has been halted by a wage dispute.
“Section 47 of the MPRDA gives the minister powers to cancel or suspend mining rights, and it makes provisions; however, a mine being on strike is not one of those.”
The analyst said he did not believe Mantashe would go ahead with such a threat, and was merely politicking.
“I do not think it is something he is definitely going to do. The ANC needs to be seen to be on the side of the workers. If it was someone else, like former mineral resources & energy minister Mosebenzi Zwane, maybe I would be afraid that the threat will materialise. Mantashe is a friend of the mining industry. Behind the hawkish political speech, he is the friendliest minister the industry has had. He is a politician after all, he has to sound like he is not the friend of capital. He has to sound like he is on the side of workers.”
René Hochreiter, a consulting mining analyst at Noah Capital Markets and Sieberana Research, said Mantashe would probably not succeed if he tried to carry out his threat.
“I don’t think Mantashe is going to get far with it. The mines are on strike. I think he will not get anywhere in court,” Hochreiter said.
James Lorimer, DA spokesperson on mineral resources & energy, also cautioned against such a move, saying it would be a huge stretch of “doubtful legality” to use section 47 to intervene in a strike.
“To do so would be to send a signal that the South African government does not subscribe to the rule of law and any investor faces having their property seized at any time. The predictable result would be that investment in South African mining, already in crisis, would dry up even further.”
We are dealing with a very stubborn company… I don’t have words to describe this company. They do not want to listen to the plight of the workers. They think people are robots; they do not listen to anything
— Amcu general secretary Jeff Mphahlele
The National Union of Mineworkers (NUM) and the Association of Mineworkers & Construction Union (Amcu) have been leading industrial action at the Kloof, Beatrix, and Driefontein gold mines since March 9, demanding higher pay.
The threat of cancellation comes as Sibanye presented a number of proposals and options to end the strike at a meeting on Tuesday, according to Wellsted. He said the latest proposals include a profit share scheme and a five-year wage deal arrangement, or a mix between the two.
“They seemed to consider perhaps a five-year arrangement but they still want those big increases that we are not going to give them over the three years because it is going to impact on the sustainability of the operations and will affect other stakeholders”.
Wellsted said the profit share proposal would be over and above the wage increase so that when times are good, the gold price goes up and the rand weakens, employees will earn more.
In April, Sibanye made a “final” offer for entry-level employees of a three-year agreement that would include a R50 living-out allowance and an R800 salary hike, taking the total monthly increase to R850.
The unions said earlier this month that they were prepared to back down on their demand for a R100 monthly living-out allowance for entry-level mineworkers, but would not lower their demand for a R1,000 a month salary increase. That would add up to a total monthly increase of R1,050.
Wellsted said the unions had remained rigid in their demands while the company had made seven adjustments. “In December we offered R450, we are not now at R850, and they have not moved.”
Amcu general secretary Jeff Mphahlele said the union did not move this week because Sibanye management’s five-year wage deal offer did not address the demands of the unions.
“The proposal is very weak. We had hoped they would come to their senses and present something good and something appetising, first to us as leadership and to the workers. So it does not meet our demands. We are dealing with a very stubborn company… I don’t have words to describe this company. They do not want to listen to the plight of the workers. They think people are robots; they do not listen to anything.”
Regarding the profit sharing scheme, Mphahlele said the returns are not guaranteed.
“We may get R215 this month, what about next month? It is not guaranteed. What matters is in the basic salary, which gives you mobility.”
There has been widespread outrage over the R300m package Sibanye paid Froneman — consisting mainly of long-term share incentives. He told the Sunday Times last week that he deserved every cent.
He said shareholders approved the R300m payout and he supports remuneration being transparent. “If you have not delivered and you receive remuneration like this, then you should be embarrassed, but to be honest, the Sibanye team has shot the lights out. Our gold division only had five years of life. We have still got 10 to 13 years of life. We have saved 30,000 jobs.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.