South African not only account for 75% of world’s yearly PGM production, it also holds 95% of global reserves of PGM

June 3, 2014

Johannesburg (June 3)  The platinum strike, which began on the 23rd of January has become a showdown with the mining houses, the media and the state on one side, and platinum mineworkers on the other.

In fact, the mining companies, top state officials and ANC politicians have been doing everything to break the strike because they recognise its significance.

The current strike, along with the wildcat strikes of two years ago, is an extremely important political event and its outcome, depending on who gains the upper hand, will likely shape the prospects of working class struggle and wage relations for the foreseeable future.

One reason why the platinum strike is so significant is due to the importance of the industry. Over the last 20 years the platinum industry has expanded massively surpassing gold as the most important productive sector in the economy.

The big three platinum companies in South Africa - Anglo Platinum, Lonmin, and Impala - between them also control a very large part of the global platinum industry.

Indeed, 87% of the world's platinum reserves are in South Africa and the bulk of these are under the control of AngloPlatinum, Lonmin, and Impala.

This means that these companies have the ability to influence the global platinum price and through this perhaps continue to shape the look of the South African economy for decades to come.

Black Economic Empowerment

The ruling ANC does not underestimate the strategic importance of the platinum sector. It is recognised as an important sector to build a black capitalist class.

Thus, the ANC-led state has made the platinum sector a priority for black economic empowerment (BEE). This focus, along with its growth, has meant that the platinum industry has become one of the few sectors where BEE has been substantial.

As such, it has been around platinum that key black capitalists, like Patrice Motsepe, Cyril Ramaphosa and Bridgette Radebe have amassed great wealth (with ANC and state backing). Through this, a section of the black elite has joined the white ruling class.

This all means that white and black business interests in the platinum sector (but also across other sectors), along with top ANC officials, have an interest in keeping the wages on the platinum belt as low as possible and smashing the strike.

Not unlike the apartheid era, the super profits that are made by platinum mining companies today, which BEE beneficiaries also benefit from, comes from extremely low wages that are paid to workers, and black workers in particular.

Undermining Workers Demands by Subterfuge

The current strike is a major threat to these super profits. If workers do win the demand of a basic salary of R12,500 a month (which they have said can be implemented over four years), the system that defines mining and more widely capitalism in South Africa - low paid black workers creating huge profits - could finally begin to be attacked. The mining houses and their BEE partners don't want this to happen.

They have, in fact, done everything in their power not to meet the demands of workers. To begin with, the companies involved stockpiled reserves in the build-up to the strike, demonstrating from the beginning that they were not really interested in considering workers' demands.

Under pressure from the long strike, however, cracks are emerging and the bosses have begun to slightly shift their position. But they are still trying to hold out for the best possible deal for themselves, which would see workers still earning far less than the R12,500 a month basic salary they are demanding.

So while the bosses are now claiming that they are moving closer to what workers are demanding, in practice they are still offering a pittance.

Bosses at this point are still only offering an R800 a month increase on the entry level basic salary of R5,000 to R6,000 a month for the first year.

South African mines not only account for 75% of the world’s yearly PGM production, it also holds 95% of the global reserves of PGM.

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