Kibanga Ampiga Mkoloni
JF-Expert Member
- Aug 9, 2007
- 18,697
- 8,843
Amidst all the confusion after the shooting of 44 protesting miners at Lonmins Marikana platinum mine in South Africa, we should not lose sight of the astonishingly simple underlying issues.
Report by Arthur McKay
We are told the workers were demanding that their wage be raised to R12 500 per month (about US$1 500), but the workers claim their salary is already at this level. They say they are sub-contracted by a company owned by billionaire South African oligarch Cyril Ramaphosa.
He only pays them R5 400 or less and pockets the rest paid out by Lonmin.
If this is so, then agreeing to the workers demands would cost Lonmin nothing and the whole dispute is between the workers and Ramaphosa. Instead of saying this, however, Lonmin has placed itself between the two and taken responsibility for negotiating a pay rise which no one has asked for.
Doing this, Lonmin is placing Ramaphosas private interests above those of its common stockholders and is neglecting its fiduciary duties. It is also leaving itself open to litigation.
Ramaphosa, in fact, owns 9% of Lonmin but was paid out US$304m in cash by the company in 2010 in a deal backed ultimately by Xstrata.
By comparison common shareholders have received only US$60m in dividends in the last two years and have incurred over US$2,5bn of paper losses. What the workers are requesting is that Ramaphosa share with them about US$18m which he is taking from their wages.
When Ramaphosa bought 50,03% of Lonmins Black Economic Empowerment partner Incwala Resources in 2010, Lonmin put up the US$304m in cash which he needed. Lonmin funded this with a share issue to which, according to Lonmin, Xstrata was the key subscriber. Since then a further US$51m of credit has been extended to Ramaphosa.
Ramaphosas company also provides all of Lonmins welfare and training services and for this, he may have been paid at least US$50m in 2011 alone. Based on the workers demands and their living conditions, we can guess at how much of this reached its stated purpose. Companies linked to Ramaphosa were also paid advance dividends by Lonmin of US$20m in the last two years.
All-in-all Lonmin seems to have paid Ramaphosa and his related companies well over US$400m since he bought into the company. This is about 25% of Lonmins current market value and is a very large amount for a man who was supposed to be doing the paying when he bought his stake.
All this casts the Marikana conflict in a very different light to what we have heard so far.
The dirt-poor Marikana workers, many from Lesotho, living in slums, wearing rags, are asking for an extra US$750 per month from one of the most powerful figures in the African National Congress (ANC) and one of the richest men in the world, and they are openly calling him an exploiter.
Such a debacle, which calls into question not only Lonmin, Xstrata and Ramaphosa, but also the whole ANC hierarchy, the reality of the New South Africa and the credibility of the ANCs many foreign supporters, not least those in the United States, helps to explain the speed and the savage brutality of the reaction.
On August 16, six days into the strike, the police opened fire injuring 112 and killing 34.
Local witnesses claim the workers were not charging at the police, but were fleeing from them as teargas was thrown at them by another police detachment. Autopsy reports apparently confirm many were shot in the back.
How could Ramaphosa exercise such influence over Lonmins executive board to be able to effectively bend it, and potentially the board of Xstrata too, to do his bidding? And what truth could the South African government have been so desperate to hide that it was judged better to risk everything and open fire on its own people, rather than let it see the light?
The answer lies at the heart of the bitter fallacy of the South African commodities boom and the emerging markets paradigm which we have lived in, in the last 15 years. The sad truth is that nothing has changed, or, more accurately, nothing has improved.
In the past there was one oligarch, Harry Oppenheimer, who controlled Anglo American.
Today there are five to 10 oligarchs. They are black and they are African. They too oppose apartheid and they too are exporting all of South Africas gold and diamonds at the present time. The reason Ramaphosa could ransack Lonmin in the way he has is because he effectively is Lonmin.
Lonmin exists in many ways to serve his interests and its foreign shareholders would do well to understand this. The whole debate about nationalisation is therefore completely moot. South Africas mines have already been nationalised and given over to a ruthless tyranny, signed, sealed and delivered by the many cheerleaders of the ANC overseas.
Report by Arthur McKay
We are told the workers were demanding that their wage be raised to R12 500 per month (about US$1 500), but the workers claim their salary is already at this level. They say they are sub-contracted by a company owned by billionaire South African oligarch Cyril Ramaphosa.
He only pays them R5 400 or less and pockets the rest paid out by Lonmin.
If this is so, then agreeing to the workers demands would cost Lonmin nothing and the whole dispute is between the workers and Ramaphosa. Instead of saying this, however, Lonmin has placed itself between the two and taken responsibility for negotiating a pay rise which no one has asked for.
Doing this, Lonmin is placing Ramaphosas private interests above those of its common stockholders and is neglecting its fiduciary duties. It is also leaving itself open to litigation.
Ramaphosa, in fact, owns 9% of Lonmin but was paid out US$304m in cash by the company in 2010 in a deal backed ultimately by Xstrata.
By comparison common shareholders have received only US$60m in dividends in the last two years and have incurred over US$2,5bn of paper losses. What the workers are requesting is that Ramaphosa share with them about US$18m which he is taking from their wages.
When Ramaphosa bought 50,03% of Lonmins Black Economic Empowerment partner Incwala Resources in 2010, Lonmin put up the US$304m in cash which he needed. Lonmin funded this with a share issue to which, according to Lonmin, Xstrata was the key subscriber. Since then a further US$51m of credit has been extended to Ramaphosa.
Ramaphosas company also provides all of Lonmins welfare and training services and for this, he may have been paid at least US$50m in 2011 alone. Based on the workers demands and their living conditions, we can guess at how much of this reached its stated purpose. Companies linked to Ramaphosa were also paid advance dividends by Lonmin of US$20m in the last two years.
All-in-all Lonmin seems to have paid Ramaphosa and his related companies well over US$400m since he bought into the company. This is about 25% of Lonmins current market value and is a very large amount for a man who was supposed to be doing the paying when he bought his stake.
All this casts the Marikana conflict in a very different light to what we have heard so far.
The dirt-poor Marikana workers, many from Lesotho, living in slums, wearing rags, are asking for an extra US$750 per month from one of the most powerful figures in the African National Congress (ANC) and one of the richest men in the world, and they are openly calling him an exploiter.
Such a debacle, which calls into question not only Lonmin, Xstrata and Ramaphosa, but also the whole ANC hierarchy, the reality of the New South Africa and the credibility of the ANCs many foreign supporters, not least those in the United States, helps to explain the speed and the savage brutality of the reaction.
On August 16, six days into the strike, the police opened fire injuring 112 and killing 34.
Local witnesses claim the workers were not charging at the police, but were fleeing from them as teargas was thrown at them by another police detachment. Autopsy reports apparently confirm many were shot in the back.
How could Ramaphosa exercise such influence over Lonmins executive board to be able to effectively bend it, and potentially the board of Xstrata too, to do his bidding? And what truth could the South African government have been so desperate to hide that it was judged better to risk everything and open fire on its own people, rather than let it see the light?
The answer lies at the heart of the bitter fallacy of the South African commodities boom and the emerging markets paradigm which we have lived in, in the last 15 years. The sad truth is that nothing has changed, or, more accurately, nothing has improved.
In the past there was one oligarch, Harry Oppenheimer, who controlled Anglo American.
Today there are five to 10 oligarchs. They are black and they are African. They too oppose apartheid and they too are exporting all of South Africas gold and diamonds at the present time. The reason Ramaphosa could ransack Lonmin in the way he has is because he effectively is Lonmin.
Lonmin exists in many ways to serve his interests and its foreign shareholders would do well to understand this. The whole debate about nationalisation is therefore completely moot. South Africas mines have already been nationalised and given over to a ruthless tyranny, signed, sealed and delivered by the many cheerleaders of the ANC overseas.
