Analysis: "You're fired" - or maybe not, South Africa's mines say

JOHANNESBURG Thu Oct 18, 2012 2:18am EDT

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JOHANNESBURG (Reuters) - According to his "final ultimatum" to wildcat strikers, Gold Fields chief executive Nick Holland is hours away from firing 23,000 miners.

In the poisonous atmosphere of the worst industrial unrest in South Africa since the end of apartheid, everything points to him making good on his threat on Thursday, adding to the 15,000 men already sacked by platinum mines in the last two weeks.

The numbers are dramatic, and have political implications for President Jacob Zuma and his African National Congress (ANC), since each miner probably supports up to 10 dependents.

The reality, however, is that the mass dismissals are just another tactic - albeit a hard-ball one - in the long standoff between management and workers over pay and conditions. When a deal is finally reached, most will get their jobs back.

Re-hiring thousands of miners may be a logistical nightmare for the likes of Gold Fields, the world's fourth largest bullion producer, but the bosses know - as do the workers - that the company has few other options if it is to restart production.

"It's very common that the employer uses mass dismissal as a way of changing the nature of the dispute," said one labour lawyer. He asked not to be named because he is involved in talks to resolve the strikes, which have hit growth and confidence in Africa's biggest economy.

"It's largely a tactical move," he said. "They don't expect to be able to run a mine with a completely new labour force."

AngloGold Ashanti, the world's No. 3 bullion producer, said on Wednesday it would decide next week whether to follow Gold Fields in its dismissal ultimatum, which falls due at 2 p.m. (1200 GMT) on Thursday.

Despite the fighting talk from chief executive Mark Cutifani in an interview with Reuters in London, the mood among strikers at AngloGold's mine in Carletonville, 40 km (25 miles) west of Johannesburg, was one of defiance and disdain.

"Come on, fire us," one man, among a group of hundreds of strikers on a hill near the mine, told Reuters Television as his friends joked and capered around him, pulling 10 rand notes from their wallets to wave at the camera.

"What are you going to do then?" he asked. "We know you're going to have to rehire us in two weeks."

WORST SINCE 1987

The strikes that erupted in early August at platinum miner Lonmin have pushed South African labour relations to their lowest ebb since a mass uprising in 1987 that successfully brought the white-controlled economy to its knees.

Some of the blame can be traced back to the police killing of 34 strikers at Lonmin's Marikana mine on August 16, the worst security incident since apartheid ended in 1994 - and to the hefty pay hike that eventually got miners back on the job.

However, it is also a consequence of the stress under which much of the industry, in particular platinum, finds itself, as well as grassroots disillusionment with the sluggish pace of economic change under nearly two decades of ANC rule.

The unrest first flared in January, with a six-week walkout at Impala Platinum, the world's No. 2 producer of the precious metal, as a result of a turf war between the National Union of Mineworkers (NUM) and the upstart Association of Mineworkers and Construction Union (AMCU).

NUM, whose close relationship with the ANC was forged in decades of struggle against white rule, was accused of being out of touch with workers and enjoying too cosy a relationship with management and the government.

Revelations that NUM leader Frans Baleni earns more than 1 million rand ($116,000) a year only reinforced the point, and helped fuel walkouts at Gold Fields by workers fed up primarily with NUM shop stewards they saw as self-serving.

Zuma made a point this week of standing shoulder to shoulder with its old friend in a bid to restore the NUM-led "collective bargaining" that has ensured relative labour stability in the mines over the last two decades.

But this misses the point that NUM are part of the problem, and may not necessarily part of the solution.

"The NUM can't come to us. They say they are scared of us," said Evans Ramokga, a representative for striking workers at an Anglo American Platinum (Amplats) mine near Rustenburg, 120 km (70 miles) northwest of Johannesburg.

"RESTRUCTURING"

Amplats announced the dismissal of 12,000 strikers on October 5, causing a sharp fall in the rand due to fears it would inflame unrest in which more than 50 people have been killed, including several NUM officials shot or hacked to death.

But Ramokga - as with his gold mining colleagues - appears unperturbed, secure in the knowledge that the world's largest platinum producer will eventually have to come

"We're waiting patiently," he told Reuters. "That's why you don't see us going to the management. We're just waiting for them."

His confidence might be misplaced.

Analysts believe half of South Africa's platinum mines are making a loss because of a fall in the price of the metal this year, and Amplats parent company Anglo American has already placed its four Rustenburg mines "under review" - management-speak for working out whether to close them.

Gold Fields' Holland has also said that "restructuring" - again, managerial shorthand for closing shafts and laying off miners - "may become inevitable" as labour costs rise and South Africa's gold mines head ever deeper underground.

The lessons from Impala are telling: having fired 17,200 miners in the depths of its January dispute, the company rehired only 15,000 when it restarted operations in March.

"Unquestionably, when it comes to re-hiring, there will be fewer jobs," the labour expert said. "And this will be one of the points of negotiation." ($1 = 8.6100 South African rand) (Additional reporting by Dinky Mkhize and Sarah Young; Editing by Alastair Macdonald)

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