Mining in South Africa

By Jason Myhill

Something that is fresh on our minds is the violent ‘Lonmin conflict’. In my opinion there are two key uncertainties with their respective extremities that determine three scenarios for mining in South Africa and in particular, Platinum mining.

Uncertainty 1 (largely outside the control of mining companies) – mine workers act violently, vs mine workers act calmly

Uncertainty 2 (within the control of mining companies) – mining companies are not transparent, vs mining companies are transparent

The ‘game-board’ that gets created using these uncertainties shows that the companies and government hold the action cards that will determine the state of play at any given point, to their profit or peril.

Scenario 1 (best case) – mine workers act calmly AND mining companies are transparent (high road)
In this scenario mining companies support a transparent and accountable sharing of the facts regarding the take home salary and lifestyle conditions of mine workers thus making the facts clear and easy to resolve. This will result in the self correction of unacceptable employment and clearly separate the stars from the rogues. This will make the responsibility of government to control the license to operate a relatively straight forward task. Mine workers act calmly accepting that there is some recognition for their plight but also that they cannot call wolf thus keeping the workers honest in the process as well.
Scenario 2 (worst case) – mine workers act violently AND mining companies are not transparent (low road)
In this scenario the frustrations of mine workers is exacerbated and with time there comes a radical co-ordination of high numbers of powerfully armed mine workers. Mining companies start ‘barracking’ their head quarters and management offices with very tight security on site. Very few workers attend work, making production virtually impossible. Mining companies move there head quarters and management offices out of South Africa leaving the operations. Some mining companies pull out completely.
Scenario 3 (intermediate, slow and precarious case) – mine workers act calmly AND mining companies are not transparent (slow road)
In this scenario mining companies continue to defend their traditional position of existence and the mine workers take the government and mining companies to the highest court resulting in major lawsuits that force the rules of the game to change dramatically. One can clearly see that this could turn into scenario 2 very quickly.

Mining companies have the best control of the situation in scenario 1. A significant point to this is that the companies hold the power to change and actually to a large extent determine which scenario plays out.

The way in which mining companies are transparent I think is critical.

This is serious stuff for the nation, the perceptions of SA and our economy!

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