Platinum stocks got whacked, in particular Amplats as news came through that inter union violence had again risen at their Siphumelele mine, part of the Amplats Rustenburg mines. Siphumelele is next door to the Khomanani mine, where remember shafts one and two are targeted as potentially being shuttered in the operational review. So, as you can imagine tensions are already high. The official Amplats parent, Anglo American release is as follows: Incident at Siphumelele mine in Rustenburg. So it seems from that release that NUM shop stewards were told to vacate their offices by the workers committee at the mine. Now, what the release does not say is that rival union AMCU was involved here. That is what is being widely reported. So, once again it is about union rivalry.
And what is in it for championing the causes of the working class? Money. Unions make money off their members, by entering into the collective bargaining process on their behalf. How much money the unions "make" in South Africa is unclear to me, but what is clear is that being a shop steward for one of the unions comes with better working conditions than the miners themselves. And more money probably. In 2010, Cosatu's revenue was nearly 71 million Rands, that was from their affiliation fee collections, grants received and political levy. That information is available from the document: Cosatu Secretariat Report 2011. Now, I can't find the National Union of Mine Workers annual income. It turns out that a few unions are rather late with their financial statements, no wonder that my sneaking around could not find the relevant documentation. I managed to find however this story from the M&G titled: State nails errant unions. There is a key paragraph in there:
- "Unions receive membership fees from their workers, which Watkins estimated at an average of R30 to R35 per member per month. This means that Cosatu unions receive R60-million to R70-million a month in dues. But Watkins said that payments for pension and provident funds, funeral schemes and many other offerings far exceed membership fees and that unions were big business."
Yowsers. See what I mean. The business of being in unions is big business. A multi million Rand business. Now you can understand why there is violence at the mines and union turf wars, it ultimately boils down to money and a "what is in it for me" attitude. So much for the collective and taking the workers needs and putting them first. You have of course seen much written about this. David McKay as ever has a cracker of a story at MiningMx: Rival unions shatter fragile peace at Amplats. His conclusion is worth noting: "It will be interesting to see how the South African government responds to this latest setback for union peace after president Jacob Zuma declared in his State Of The Nation Address to parliament last week that public protests would no longer be tolerated." You heard anything yet?
So, what is the fallout expected to be? Well, as far as I can tell, don't expect that specific mine to be open today. More lost revenue for the company who is under pressure already. Very bad. Bloomberg and CNBC Asia ran the stories in their headlines. Err.... at the top of the hour. And I have already seen a research note that suggested that this event suggest further downside and heightened risks to mining equities in South Africa. As a journalist friend of mine said: "Money, money and more money, while people face losing their jobs. It's quite sickening actually." As for Byron, I might actually have to tie him to his chair today, as he becomes more and more enraged with the unions in South Africa.