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Mathunjwa Backs Down

On 16th January this year we ran an article in which we suggested that the confrontation between AMCU and Sibanye was a microcosm of the inevitable post-election battle between the government and the union movement. We concluded that article with the following:

“To us it looks as though Mathunjwa is in a very difficult position. He has committed himself and his followers to a battle that he will probably lose. Sibanye is not under any financial pressure, but AMCU members are. And if Mathunjwa loses this battle it will probably destroy his reputation as a fiery populist and it will be a significant victory for sensible economics in South Africa.”

Now Mathunjwa, who became South Africa’s most feared and populist union leader in the platinum strike of 2014, has indeed backed down and accepted a humiliating defeat at the hands of Sibanye and Neal Froneman.

It was a battle that he was always going to lose. Simple economics dictated that Sibanye, with its highly profitable Stillwater operation in America and back-to-back capital raises, had plenty of cash to continue the strike more or less indefinitely. AMCU members on the other hand had gone for five months without wages, nine people had been killed and 60 houses burned down. They were desperate.

In the end, Mathunjwa had to agree to exactly the same terms as had been agreed by Sibanye with the other unions in early November 2018 – with a R4000 ex gratia payment to each of their members. There was no alternative.

So Mathunjwa has effectively been emasculated immediately before the commencement of union negotiations in the platinum sector. AMCU members in the platinum sector will be unwilling to follow the example of their members in the gold sector. Sibanye will enter platinum negotiations with the upper hand.

And this outcome, predictable as it was, sends a message to President Ramaphosa and his administration – even the most fiery trade union member can be beaten. As he contemplates the inevitable show-down with the union movement after the elections, Ramaphosa must take comfort from this awareness. Populism and union power are not insurmountable.

Sibanye’s shares jumped 6,6% on the news of the settlement.



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