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The noble metal’s base conflict

First Published in BusNet on 3 April 2014

Platinum is the noble metal that allows rich Westerners to drive our cars each day, and still breathe fresh air. It’s also the least reactive metal on our planet, until you bring politics into the equation.

More than 80% of the world’s platinum reserves are concentrated in a small pear-shaped parcel of South Africa known as the Bushveld Complex, a rare ‘geological intrusion’ which was formed 2 billion years ago.

The national strategic importance of this platinum industry is vast. In 2011 it contributed 11% of South Africa’s exports and 5.7% of its GDP. Platinum is also the nucleus that has helped create around 400,000 jobs, including its many supply-side industries.

Most industries are either ‘capital intensive’ or ‘labour intensive’, yet it requires both massive capital and massive labour to extract and refine platinum. Those putting up the CHF 31bn of capital (that the industry will consume over the next five years) share their fate with the 197,847 direct employees who turn up for work each day. And that’s where the current problems begin.

Since 2011 this industry has been locked in an unimaginative and futile power struggle, starkly signified by the horrific massacre of 34 miners at Marikana in August 2012, and the past ten weeks of strike action, which has cost almost CHF 1bn in lost revenue, 44% of which would have gone to employees as salaries.

This strike bears the hallmarks of classic Marxism – a revolutionary socialist struggle between workers and capitalists, Former ANC youth leader Julius Malema (since expelled from the ANC for hate speech) remains a vocal advocate of nationalising mines – a position still held by the National Union of Mineworkers.

Sadly, those involved in the collective bargaining have overlooked many of the insights from nearly 150 years of social progress since Marx published Das Kapital. This is a classic case of co-dependency, since neither party can operate without the substantial role of the other. Both sides need to recognise this and move forward together, with reciprocal respect.

It should be easy for capitalists to respect the rock driller, who works his 8-hour shift deep underground, wrestling with a 25kg pneumatic drill, and praying that he’ll not be trapped by a rockfall when the blasting begins. It is less easy for workers to see the beauty in their capitalist counterparts who have amassed the funding, the machinery and the organisation that makes their employment possible.

But there are only 100 cents in a South African Rand, and the two parties cannot agree on how they should be allocated. So the two unions, NUM and Amcu, decided to reject the 9% pay offer and hold-out for R12,500 (CHF 1,000) and have instructed their members to stay at home, deprived of any salary, despite the incredibly poor social ecosystem in which there are ten dependents for every breadwinner.

The contagion will now spread to other industries, after Amplats has cancelled agreements with its suppliers on the grounds of Force Majeur.

Their collective inability to put pragmatism in front of idealism (which is particularly difficult in an election year) and the ten weeks of successive failure to find a workable harmony has trapped this precious industry in an economic downdraft.

The international companies that manufacture and use autocatalysts are now using platinum more thriftily, while focusing their research on finding ever more ingenious ways of substituting it with cheaper alternatives such as palladium. Those foregone salaries are lost for all time, and the dependency ratio will only click upwards, as more miners loose their livelihood.

And this will go on, until the idealists realise that although Platinum [78 Pt] is one box ahead of Gold [79 Au] in the periodic table of elements, it is only 4 boxes ahead of Lead [82 Pb].