Demands Escalate As Strikers Go For Broke in South Africa

A Sishen mine protest in northern cape. The Republic of South Africa has been hit by a series of strikes since early 2012., a photo by Pan-African News Wire File Photos on Flickr.

Demands escalate as strikers go for broke

Workers have held Sishen mine hostage with demands far higher than their peers elsewhere. The developments have left the company dumbfounded.

19 Oct 2012 00:00 - Lisa Steyn
South African Mail & Guardian

Wildcat strikes at Sishen mine in the Northern Cape turned nasty this week when workers ­threatened to roll R3.3-billion worth of vehicles into the 4.5km deep pit .

Everything about Sishen mine is big these days, from the size of the giant hole in the ground from which iron ore is extracted to the R570 000 bonuses staff received at the end of last year, the R31 000 monthly salaries some workers receive and the 7m-high trucks worth R3.3-billion that several hundred workers seized and held hostage for the past two weeks.

Also big are the seven-storey-high dumps where the workers parked these trucks, which are in short supply and can take two-and-a-half years to replace, threatening to destroy them by crashing them down the dump into the 4.5km-deep pit.

Equally big is the daily loss at Sishen, now estimated at $14-million a day.

A small group of the 12 700 workforce seized the Kumba Iron Ore mine on October 3 and held equipment worth billions ransom in demand of a R15 000 salary hike. Under the cover of darkness, police and private security moved in, arresting 47 people and securing the mine's property in the early hours of Tuesday morning – but the battle was not yet over.

The developments left the company and many Kathu locals dumbfounded, considering that, only last year, Sishen paid out R2.7-billion to workers as part of its Envision employee empowerment scheme.

All permanent workers who had been employed at Sishen for five years or more received the maximum payout of R570 000 as part of Envision and all workers still receive an equal amount of dividends every six months – R33 000 to date this year, because Kumba's share price has remained strong at about R550.

Those who had not been employed by the mine for the full period received smaller amounts. If dismissed, the strikers will lose out on another employee windfall due in 2016.

On Tuesday evening a group of more than 100 workers gathered near the hostels in the settlement of Sesheng to discuss how to take the fight for a better salary forward. Gleaming cars of every colour and brand occupied the parking spaces nearby.

In the distance, the colossal ore-moving trucks remained eerily perched on Sishen's mine dump, where their colleagues had played out the hostage scenario 24 hours earlier. The trucks' gears were revved for days and a security guard stationed at the mine told the Mail & Guardian the occupants had positioned the high-maintenance vehicles against large tyres that, if removed, would cause them to be toppled into the pit. They also positioned tyres beneath the vehicles, ready to set them alight if needed.

Workers said only some of them had been detained because they had occupied the dump in shifts during the strike action and had the means to enter and leave the mine unobserved.

Colonel Hendrik Swart, police spokesperson in the Northern Cape, said the raid involved "thorough planning for about three days … some of these guys [those carrying out the raid] were very lucky to escape unharmed".

The war has started today

One truck driver, who claimed to have been at the scene but escaped arrest, said the police and a private security company moved in with brute force, firing rubber bullets and beating up passive strikers. "We were caught off-guard … fatigue is the enemy of a man."

Swart said there had been some minor injuries and the local hospital confirmed that seven people had been admitted.

Mine management celebrated the success of removing the transgressors from the property and the share price picked up, but those who were not present at the time of the raid, yet still claimed to be part of the strike, insisted that "the war has started today".

"We never intended for this to be a violent protest. But this has changed everything," said Tumani, spokesperson for a group of workers toyi-toyiing in Sesheng.

Meanwhile, the police arrested two people who had petrol bombs in their vehicle on the road between the town of Kathu and the mine.

The disgruntled employees have said that those who are demanding an additional R15 000 for all workers fall within the first four grades. Representing a 41% increase in the company's wage bill, it is far higher than anything demanded in the wave of unprotected strikes that has hit the mining sector in recent months.

They insisted to the M&G that some of them earned less than a R10 000 basic salary each month.

Empowerment

But Yvonne Mfolo, Kumba executive head of public affairs, said the profile of those who stayed away from the October 3 shift showed that these employees ranged from mid-level operators to artisans and some earned a basic salary of R31 000.

A payslip presented to the M&G by a Kumba truck driver, who supports nine dependents, showed a basic salary of just more than R9 600. Additional benefits and substantial overtime pushed the earnings up to R17 000, but after tax the worker took home R11 260.

A payslip from another truck driver of the same grade, but who had only been at Kumba since 2008, showed a basic of R8 809 that, with added allowance, amounted to almost R14 200. But after tax the amount he takes home is R10 789.

Mine management expressed surprise that workers were not only willing to risk their jobs and imminent Christmas bonuses, but had also put their payouts from the company's empowerment scheme at stake.

Some workers claimed that the majority of those on strike had received much less in the empowerment payout – as little as R1 000.

"Some of us did not even buy cars," Tumani said.

However, Mfolo said of the 300 employees identified as striking during the shift on October 3, none had been with the mine for less than two years. A payout of R1 000 would have been for those working for the mine for a very short time – a month or so, she said.

Disgruntled workers

Following the inception of the scheme the company's shares have skyrocketed, ensuring a windfall for employees. Those who received the full amount were upset by the amount of tax they had to pay. John, a Sishen employee, said he qualified for the maximum payout but was disappointed when he received only R365000 after tax. With the money he began construction of a five-bedroom house in his hometown of Kuruman, 45km away, and also bought a R220000 car, cash.

Mfana, another Envision recipient, received R195 000 after tax and has also built a house in Kuruman. But he was expecting a big return from the South African Revenue Service (Sars) that never came.

Many of the disgruntled workers are adamant that they were required to pay only 14% tax, not 40%, and the mine pocketed the rest.

"We've [spoken to] Sars and ... Sars analysed payslips, especially during the Envision payout. They came back and said it was all above board," said Mfolo.

However, at the time of the Envision payout, the taxman found that some workers owed the government money and levied additional taxes on salaries to recoup it.

As shareholders of the company, the striking workers had also received R33 000 in dividends this year. But they said they could not wait for the second payout of Envision in 2016, when the final amount will depend on the share price at the time.

"We can't wait until 2016 when we are suffering now," Mfana said.

Hotly contested issue

Others believe the strikers are overstepping the mark.

"They are mad. We don't know what they are thinking," said a domestic worker working in Kathu.

"Hulle gaan al daai geld aan die brand steek [they are going to set all that money alight]," said a Sishen employee who did not strike.

The strikers said many of the mine's employees lived in the nearby town of Kuruman and were disgruntled about having to absorb the cost – more than R500 – of travelling to and from the mine.

Mfolo said the travel allowance to and from Kuruman was a hotly contested issue, but it had been resolved and workers would receive an allowance from this month.

The strike follows a two-year wage agreement settled between the mine and recognised unions in July this year. It allowed for a 9% to 12% increase for employees on a cost-to-company basis, said Mfolo.

Despite the strike being unprotected and dissociated from unions, strikers insist there is no ill feeling towards unions such as the National Union of Mineworkers – at least not like what has been seen at other mining strikes across South Africa in which NUM members have been victimised and 23 killed.

But other workers, one sporting an NUM shirt, said the union did not resolve its members' grievances with mine management. Many suspected corruption and said the concerns of members were too easily "bribed out of shop stewards' minds".

Dramatic

"It is corruption, we think. They are not fighting for us," Mfana said.

"Now we have it where the union is split into two groups at Sishen: those who are supporting the strike and those who are distancing themselves," said the worker in the NUM shirt.

On Tuesday evening, Cosatu in the Northern Cape issued a statement condemning the mine for the "assault and arrest of striking miners …. while they were on a peaceful action".

But Lesiba Seshoka, the NUM's national spokesperson, said "the demands may have been genuine, but the methods [of the workers] have been dramatic. An illegal strike is one thing, but seizing the mine's property is a criminal offence … There are better procedures."

Cosatu in the Northern Cape and the NUM have called for an investigation into the raid, citing concern that the mine management had violated its own safety regulations. "Mine health and safety is not at the discretion of the employer. They cannot have an exclusive right to violate it," Cosatu said in a statement.

But Mfolo said: "This exercise was co-ordinated with the police, so safety risks were addressed in the plan. No mining activity was taking place at the time, because production had been halted since the beginning of the strike."

Striking workers said the events at Marikana and elsewhere in the mining sector had not prompted their actions. "We have been planning this for a long time – every time the management does something we don't agree with," Tumani said.

Disciplinary hearings

Three hundred workers initially downed tools, but the mine said the number had dwindled to 120, less than 1% of the 12 700 employees, before disciplinary hearings took place on October 12. On Monday, 113 workers were dismissed and given four days to appeal.

"We didn't want it to come to this conclusion," Mfolo said. "We offered them blanket amnesty and no criminal charges – just a final written warning. Then, at the last minute, they turned around and said no, they want the money."

The strikers appear to be uninterested in appealing. "From the onset this strike was illegal. We are not going to bother to follow legal structures," Tumani said. Workers said until the mine was prepared to discuss the wage demand, there would be no resolution to the strike.

Striking workers had their own strategy to regain access to the mine, but would not supply details, he said. Some contracted workers also claimed to be part of the strike.

"If there was any leadership skill, this wouldn't have happened," said Mfana.

Mfolo said meetings had been arranged between the chief executive, head of human resources and union representatives.

"Workers must be sure their representatives address their issues with management."

Those arrested appeared in court and the hearing was postponed to October 26.

Financial repercussions felt at many levels

Each employee would suffer from the actions of a small group, said Kumba Iron Ore spokesperson Gert Schoeman.

The Sishen operation in Kathu is one of the largest single open-pit mines in the world – 14km in length and 2.5km in breadth. The mine has been out of action since October 3 and $14-million in production has been lost each day.

"If you lose revenue of one point something billion, it will have an effect on the company's performance," Schoeman said. "Every one of their [the strikers'] colleagues will be affected. They will feel it in their pockets." He said the government had lost "a couple hundred million in income tax".

Although overseas customers have not been affected by the unrest, Kumba issued a force majeure last week to its only local customer, ArcelorMittal South Africa, indicating there could be a problem with supply. It was originally estimated that supply would not be affected until the 15th of the month, which made it imperative that the retraining of workers and ramping up of production started immediately.

Kumba said safety training began on Wednesday. It would likely take a week before the mine would reach full production again.

The mine remains wary of workers and has security measures in place.