The mining industry holds South Africa in high regard as one of the greatest min-ing nations. The region has vast resources and is steeped in mining history. Those resources lie at depth and can be challenging to mine, which often proves costly. Underground mining methods are labor intensive and the mines’ access to a large pool of labor has helped them remain profitable. Still of the $676 billion invested in mining last year, South Africa received only $25 billion (4%).

South Africa is also Africa’s wealthiest country and the world views South Africa as the gateway to the sub-Saharan continent. Business has flourished in urban areas, such as Johannesburg, Pretoria and Cape Town, which are worlds away from the rural settings where the mines are located. Even though mining only represents 10% of the GDP, people are worried that the strikes will spread to other sectors. The most violent protests South Africa has experienced since the end of the apartheid era has focused attention on wealth inequities.

South Africa’s mining industry employs about 500,000 people and the nation cur-rently suffers from 25% unemployment. Gold Fields currently has 24,000 miners strik-ing illegally. “This unrest comes about because of the simmering anger about growing inequality in South Africa and workers feel they are not benefiting from the wealth they are generating,” said Mamphela Ramphele, the chairwoman of Gold Fields. “They have lost faith in their representatives. They believe employers are not doing a fair deal with them and also feel the government doesn’t care about their welfare.”

The decision by Amplats and others to fire the striking miners establishes a firm position in labor negotiations. Technically, the miners have lost all rights to long-term benefits such as severance pay. The Amplats CEO says they are committed to participating in centralized engagement structures driven by the South African Chamber of Mines. They are also working with local authorities to establish law and order. The Chamber of Mines, which also represents the major gold miners, is nego-tiating with labor representatives to establish a framework for negoiations.

The unions, however, have fractured. Traditionally, the miners were represented by the National Union of Mineworkers (NUM). Several NUM branch leaders have been killed since the uprising began. Today, the Chamber of Miners is negotiating with three groups, NUM, UASA and Solidarity. The Congress of South African Trade Unions has also entered the discussions, and is calling for an inquiry into the work-ing and living conditions in the mining industry. The African National Congress has also met with the Chamber of Mines to discuss developments.

This is a complex situation. Massive across-the-board increases in pay for such a labor-intensive sector could render the mines uncompetitive. Yet, it’s easy to under-stand the miners’ desire to improve their situation. Black Economic Empowerment was supposed to redistribute the wealth evenly. Unfortunately South Africa’s eco-nomic inequalities have worsened and the current situation is no longer sustainable.

Steve Fiscor, Editor-in-Chief, E&MJ