Rustenburg mines, not worth all the trouble!


If the strike were to end and 80, 000 miners were to be offered R12 5000 a month, how long would the operations run before they are closed?
It is quite tempting to ask, and it is not something the Association of Mineworkers and Construction workers (AMCU) leadership might be eager to ponder. Nonetheless, it is a reality they might have no choice but confront sooner or later.
Miners and union leaders alike should be worried. Anglo American Platinum (Amplats) is finding the decision to dispose of its strike-hit Rustenburg Platinum mines very tempting, resigned to the reality that the end to the strike is nowhere in sight. Neither party is willing to compromise – AMCU is sticking to its demand while Amplats says yielding does not make business sense.
According to Amplats, the loss of potential earnings of about $92 million (approximately R 920 million) – an equivalent of 4,000 ounces of platinum each day – each day of the three months during which its operations have been idle, is unbearable.
While the Rustenburg area holds the largest platinum deposits in the world, mining the deep ore is labour-intensive, rendering mechanisation costly. To cap it all, traditionally, the area has been a hotbed of union activism, and the situation might not change any time soon. Unsurprisingly, 75% of economic analysts whom Transform SA surveyed concurred that only brave investors would be willing to take the plunge, given the circumstances.
Small wonder, consequences of the strike seem to have taken the sting out of Amplats’ enthusiasm, judging from comments Mark Cutifani, the Chief Executive of the London Stock Exchange (LSE) listed firm, made recently. He said: “The Rustenburg resource is no longer what it used to be.
“I don’t think that’s where our best skills set sits. That’s why I’ve been quite vocal saying we should consider taking a back step from Rustenburg.”
Cutifani revealed that Anglo American felt that it should be focusing on more mechanised operations, an area in which it excelled. And as regards the fate of its Rustenburg subsidiary, he said: “We will allow someone who has better skills set in those kinds of assets.” It won’t be surprising to see the company eager to let go of the mines if the right bid price came.

4 thoughts on “Rustenburg mines, not worth all the trouble!

  1. There is no doubt that if mine bosses decide to close shop that ill have a negative impact on the country. People will lose jobs in a coutry thats has high unemployement rate. The strike is not good for anyone. The matter must be resolved before its too late

  2. Remember that the union is arguing that the miners in other countries are paid more than the ones in South Africa for the same kind of work. Apparently miners in Australia are paid 4 to 5 times more that the ones in South Africa. We are the no 1 producer of platinum in the world perhaps now we can safely say we used to. We were followed by Zimbabwe. We therefore have a mature platinum mining sector hence I believe salaries should not be that different in fact our miners should perhaps earn more. I’m not suggesting that Mathunjwa is a responsible leader by allowing such a long strike to take place but I believe that discussions may proceed while people are at work. A strike must be a means of last resort, but companies must be more transparent and must also transform.

  3. We sholudnt be talking about transformation 20years down the line. Transforamtion should have happened long time ago. But unfortunately it didnt happen beacuse companies dont want to transform. No doubt the miners should be earning more than they are earning now.

  4. Of all the sectors in business, mining seems to be lagging behind in terms of transformation. The union might argue that miners’ in other countries are paid more than what their SA counterparts are getting, howeve I believe that the union has not considered that our country economies are not the same. SA is still a developing country so trying to compare it to other developed economies is really not the way to go, because it will cause problems to arise which is what we are seeing at the moment. In all honesty AMCU and platinum producers’ shouldn’t have let the strike continue to where its at, because now there are shortcomings for all parties involved.

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