Government and miners worlds apart on Social and Labour Plans (SLPs)
15 December 2016
The statement by the presidency last Sunday, that platinum mine Lonmin is in danger of losing its mining rights if it does not accelerate implementation of its housing plan, was a shock only in its crudeness. It confirms, yet again, a long-standing attitude on the part of Jacob Zuma’s government. At the same time, it underscores the failure of political office holders in South Africa to appreciate what the industry offers the country in terms of growth and jobs.
Lonmin is, of course, the company that was at the eye of the storm in 2012. It was on its property that the South African Police Service (SAPS) shot 34 mineworkers, in what was labelled the ‘Marikana Massacre’. Among the many causal factors identified by the Farlam Commission was the slow implementation of housing and the conversion of single-sex hostels for family accommodation. Lonmin was directed to amend its Social and Labour Plan and had done so by October 2014. However, in late 2016, the issue is in the news again, with reports of tensions over the allocation of housing opportunities and the death, in mob violence, of a community leader.
The rights and wrongs of matters on the ground are not clear at this point. But it is clear that the company has, like all mining rights holders in South Africa, put considerable effort into the housing issue. After Marikana, it committed R100 million per annum towards housing. In 2015, the company spent R305 million, excluding procurement, on Social and Labour Plans (SLPs). It has completed the conversion of all hostels into 1 908 single and 776 family units.
While all of this has been going on, markets have turned heavily against the platinum industry. Lonmin had previously pointed out that it is imprudent to regard SLP commitments made, when applying for mining rights, under certain market conditions, as binding, under the conditions that prevail several years later. It need hardly be pointed out that, over time, conditions on the ground change, developing in response to the implementation of SLPs, among other factors.