South Africa mines prepare to enter an unlit pit of wage talks Less than a year after South Africa's mining sector was hit by a wave of violent wildcat strikes, mining companies are preparing to head into uncharted territory as the industry readies itself for two-yearly wage negotiations in a volatile and unpredictable environment. Industry officials say the salary discussions, which will affect the gold, platinum and coal sectors and are expected to begin around June, will be among the most crucial for the sector since the end of apartheid 19 years ago. The talks will not only be taking place with memories of the costs - both in terms of lives and revenue - of last year's industrial unrest fresh in people's minds, but they will also involve an upstart union, the Association of Mineworkers and Construction Union (Amcu), for the first time. Since the wildcat strikes erupted in platinum last August, Amcu has made rapid inroads into the platinum industry and can boast majority representation at Lonmin and Impala Platinum, as well as at Anglo American Platinum's Rustenburg operations. It has also built a presence in gold, with its representation in that sector put at about 17 per cent, while its membership in coal is said to be insignificant. The result is that Amcu is now a player in both the labour-intensive gold and platinum sectors, which combined employ some 330,000 of South Africa's 500,000 mine workers, and a serious threat to the National Union of Mineworkers (Num), which has dominated the industry for three decades. Rivalry between the two was blamed for exacerbating last year's unrest in which about 50 people died, including 34 striking miners shot by police near a platinum mine operated by Lonmin in Marikana. Elize Strydom, a senior executive at the Chamber of Mines and a lead negotiator in the gold talks, says the unions have yet to present their demands. It is also unclear whether Amcu will be willing to engage in collective bargaining in the gold sector. It is hoped the fledgling union will take part, but if it does not that could force gold companies - which negotiate through collective bargaining under the Chamber - into the complex scenario of having to have separate talks with different unions. "We will do everything within our power to try and avoid that," Ms Strydom says. You don't want to end up with two separate terms and conditions for the same category of workers in one company - it will be disastrous; very bad for industrial relations and workplace relations. The economics of both the platinum and gold sectors are looking very tough at the moment and it's really important that all stakeholders recognise [that] Roger Baxter, Chamber of Mines In platinum, where groups have negotiated on an individual company basis, there has been talk of a need to shift to collective bargaining but that is not expected to happen this year. That means there is the risk of one company setting a marker that workers at other mines will demand be followed. Platinum producers will also have to decide how they will negotiate with rival unions. Union representatives, meanwhile, are also likely to find it tougher to sell deals to workers who displayed increasing militancy last year in their demands for better wages and conditions. And companies will enter the talks amid warnings that a number of platinum and gold shafts are already operating at losses or on wafer-thin margins. Lesiba Seshoka, a NUM spokesman, says he does not expect the talks to be difficult, but adds that the demands are likely to be higher. "The members may see, in the wake of what happened last year, they want something far much bigger," he says. Last year's unrest not only exposed the fragility of the traditional labour dispute resolution mechanisms, but also the ability of workers to co-ordinate and mobilise as they formed their own committees. And the fear is that the rivalry between Amcu and the Num could exacerbate demands as each seeks to claim to be the legitimate representative of workers who have shown increasing disgruntlement with unions. "Management teams are having to learn new skills because you are used to dealing with one party, to dealing with people who you feel understand one another, but the dynamics have changed," says an official in the platinum industry. Last year's strikes, which lasted for weeks, are estimated to have cost the industry more than R15bn in lost revenue and held back the already sluggish growth of Africa's largest economy. Roger Baxter, another senior executive at the Chamber, says over the past five years the industry has seen average remuneration packages per worker rising by 11-12 per cent per annum. The warning from executives is that similar hikes this year would accelerate restructuring in the industries, including shaft closures and job losses. Amplats, the world's biggest producer of the precious metal, has already announced plans to restructure its South African operations, which could lead to thousands of job losses. "The economics of both the platinum and gold sectors are looking very tough at the moment and it's really important that all stakeholders recognise [that]," Mr Baxter says. The challenge will be finding a compromise that appeases workers without overburdening companies. If serious industrial unrest were to erupt again it would heap further damage on one of the world's top mining nations - which was already struggling to compete with peers - and further tarnish South Africa's image as an investment destination. "The whole world is watching us and we need to show them that we can be professional, that we can be law abiding, we can actively negotiate and try and strike a balance of give and take," Ms Strydom says.