AT HOME AND ABROAD: Mechanised mining is going to devastate rural areas – by Allister Sparks (Business Day Live – June 18, 2014)

EVEN as the platinum strike appears to be moving towards a settlement, the consequences of this drawn-out conflict are going to be with us for years to come. Not only will it take the miners themselves years to make up for their lost earnings, but the mining industry itself will never be the same again.

A revolutionary change in the way South Africa’s oldest and most fundamentally important industry operates lies ahead, with far-reaching consequences for all concerned, not least for our future shape of labour relations generally.

The days of “low-wage, high-employment” on which our mining industry was founded nearly 150 years ago are over. A radical switch to “high-wage, low-employment” lies ahead. In the new era, only a few years from now, miners will not only be paid the minimum of R12,500 a month they are demanding now, but much more. However, far fewer will be employed.

Machines will do most of the work and a relatively small number of highly skilled, highly paid mine workers will operate them.

Old mines that are nearing the end of their productive lives, or that don’t lend themselves to mechanisation, will be shut down or sold off to smaller operators that feel they can still operate them profitably. But the big platinum producers will focus on new mines, especially open-cast mines such as Anglo American’s rich Mogalakwena mine in Limpopo, which can easily be mechanised.

That way, the mining companies will continue to be profitable and individual miners will earn considerably more, but they will be much more productive because they will operate the machinery that does the actual mining. As Anglo American’s new CEO, Mark Cutifani, has noted, the average mine worker in Australia (his home country, where mining has long been mechanised) earns five times what the average South African miner earns, but he is 10 times more productive.

That will enable the producers to employ far fewer of them. Which means tens of thousands of our mine workers will become redundant.

When the president of the Association of Mineworkers and Construction Union (Amcu), Joseph Mathunjwa, declared triumphantly last week that “this strike has changed South Africa and the mining industry”, he was quite right. But, as the old saying goes, “beware of what you wish for”.

The migrant labour system will come to an end — a system which, for all its well-publicised social ills, provides work and sustains the families of about 300,000 mine workers, as it has done for the past 150 years.

The effect on our rural areas, particularly the Eastern Cape, as well as neighbouring countries such as Lesotho, Mozambique, Zambia and Malawi, where most of those migrant workers come from, will be severe.

The mining companies have been aware for some time that this transition would become inevitable at some point, but they did not expect it to arrive so soon. Now it has been precipitated by the crippling Amcu strike. That means there won’t be time to phase it in gradually in a planned and more painless way. The huge losses the producers have already suffered because of the strike means they will be under pressure to speed up the process.

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