Lonmin, the world’s third largest platinum producer, was taken over by Sibanye-Stillwater on 7 June. Had this takeover not taken place Lonmin may well have been under business rescue by now.
Lonmin’s cashflow problems initially arose from the failed mechanisation attempt by Brad Mills, its CEO from 2004 to 2008.
In August 2012 a second major blow hit the company by way of the Marikana events. A few months after Marikana Ben Magara was appointed as Lonmin’s chief executive. While Magara did good things too, he expedited Lonmin’s end.
I got to know Magara as head of Anglo American Coal and welcomed his appointment as he was part of Anglo’s pioneering work to create a leadership forum. This forum, which is still running successfully, consists of Anglo’s top leadership, the Minerals Council South Africa, the four recognised mining trade unions and the Department of Mineral Resources. The forum meets quarterly for alignment discussions and the principle of inclusivity applies.
However, shortly after Magara’s appointment the alarm bells began to ring when he told me that his goal was to establish a strategic friendship with Amcu president Joseph Matunjwa. In August 2013, a few days before the first Marikana anniversary, Lonmin informed the trade unions Solidarity, NUM and Uasa that Amcu would be the only recognised trade union at Lonmin from then on.
Solidarity warned Magara that he was playing with fire and that he would expose himself to criticism because earlier, on 3 July 2013, all players had signed an agreement that makes provision for steps to prevent a second Marikana.
One of those steps was to phase out the undemocratic winner-takes-all principle of trade union recognition. And thus, it happened that the company that caused the mining unrest was the first to breach the agreement. Magara’s response was that he does not let criticism deter him because he follows the advice that the chair of Lonmin’s board gave him at the time of his appointment, namely “that to survive as a CEO one has to have a small head and a thick skin”.
Magara was criticised from all quarters and had no choice but to revoke the decision. At that juncture, wage negotiations kicked off and Amcu’s devastating five-month long strike in 2014 was the upshot. Magara was stunned by the roughly R4 billion the strike had cost Lonmin.
In 2016 the subsequent platinum sector negotiations went inexplicably smooth between Lonmin and Amcu. We were soon to discover what the secret deal was because soon after the negotiations Magara once again derecognised the three other trade unions.
At that stage, Amcu had so much power that 158 machine operators, all Amcu members, refused to do other work after the Newman shaft had been closed. For 18 months they were sitting idle at work until Magara authorised his management to take steps against them.
Meanwhile, our discussions with Magara about our recognition resulted in empty promises time and again. As a last resort we three trade unions went to the Labour Court and after a long legal battle our rights were restored by the court by the end of last year.
After this victory, we assumed that the “unholy pact” between Magara and Matunjwa had been severed but in May 2019, a mere few days before the Sibanye-Stillwater takeover the two concluded an agency fee agreement. This meant that employees not belonging to Amcu also had to pay Amcu monthly membership fees.
We three disadvantaged trade unions immediately turned to the Labour Court, and last week this court declared this agreement too invalid.
The way in which a mining house practices its labour relations is usually also the way in which a mine is managed, and that is why Lonmin’s demise could be predicted.
At the first meeting Sibanye held with their new staff, Amcu members’ inappropriate message to their new employer was: “Don’t touch the current service provider!” – clear proof of the patronage that exists between local trade union leaders and service providers – that is Magara’s legacy.
Gideon du Plessis is Solidarity’s General Secretary