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Thursday, 05 December 2013

Marikana as a Tipping Point? The Political Economy of Labour Tensions in South Africa’s Mining Industry and How Best to Resolve Them

  Ross Harvey
SAIIA Occasional Paper No 164, November 2013

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Governance of Africa's Resources Programme

Before 16 August 2012, the platinum-mining South African town of Marikana was still largely unknown outside the mining sector. On that fateful day, everything changed. A toxic cocktail of a brutal police force and grievance-mobilised workers resulted in the death of 34 striking mineworkers.

Tragedies such as Marikana tend to catalyse change – a potential tipping point on the trajectory of South Africa’s political economy. Given the salience of labour–employer and inter-union labour tensions as precipitating factors to Marikana, the paper asks what an optimal resolution of these tensions might look like for the sake of the industry and those it employs. It also suggests how such an outcome could plausibly be achieved within the existing parameters of de facto power in South Africa’s mining game.

The paper contends that that there is a statistically significant negative relationship between labour tensions and mining investment attractiveness, controlling for commodity price increases and corruption. It also finds that the institutional context in South Africa’s mining sector currently creates incentives for unions to value violence and unprotected strikes over co-operation. The incumbent National Union of Mineworkers has a distinct interest in maintaining legislation that effectively crowds out union competition. Negotiations between mining houses and competing unions are characterised by a classic prisoners’ dilemma (PD), with players being held hostage by their relative constituents from arriving at a mutually beneficial outcome.

Finally, the paper shows how this PD can be transformed into an assurance game through attaining a focal point such that co-operation is valued over violence. This would undergird sustainable performance in the mining industry in the long run that maximises employment, the benefit of which cannot be overstated in the South African context of poverty and inequality.

Author: Ross Harvey