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Lonmin’s poor compliance with its Social and Labour Plan (SLP) obligations was a major bone of contention during the final day of the Competition Tribunal hearing into its proposed takeover by Sibanye-Stillwater.
The tribunal, held in Pretoria over three days last week, heard from the department of mineral resources (DMR) that while Lonmin had complied with most of the aspects highlighted in the Mining Charter, it had failed dismally to meet its SLP targets.
So said department officials Ndlelenhle Zindela and Redbone Nkambule.
This, despite one of the remedial actions recommended by the Farlam Commission, which probed the August 2012 massacre of 47 people at Lonmin’s Marikana mine.
The commission had recommended that the DMR force Lonmin to meet its obligations to provide housing to mine workers, after it found the company’s failure to do so had “created an environment conducive to the creation of tension, labour unrest, disunity among its employees or other harmful conduct” – eventually leading to the massacre.
Lonmin, in its SLP cycle dating from 2006 to 2011, committed to building 5 500 houses. However, it built only three houses. Nkambule was at pains to explain to the tribunal that the company had had to carry over its obligations in order to catch up.
The DMR seemed to be defending Lonmin when its officials were pushed to admit to having failed to force the mining company to comply with the SLP policy.
“In our view, if employees tell the mine that they cannot afford the houses, the employees cannot force the company to build those houses and force them to stay in those houses,” said Nkambule, adding that the department was convinced that it had enforced compliance.
In its SLP cycle of 2013 to 2017, Lonmin committed to building 4 000 family apartments. However, the company applied to the mineral resources department earlier this year to reduce that number to 1 240 instead, resulting in the total number of houses it has built, or will build, since 2006 amounting to 1 243.
In defence of the facts put by the tribunal to the DMR, Nkambule said the department’s role was not to close down the mine, but rather, to ensure growth of the industry.
“Compliance may not have happened as they [Lonmin] had committed on paper. We need to be open and realistic to the fact that when you draft a SLP at its first level, you make a commitment to address socioeconomic challenges within five years – and within that period markets may change,” she said.
Nkambule added that because of the 2008 economic meltdown, many companies did not comply with the SLP during that period.
The parties opposing the proposed merger between Lonmin and Sibanye-Stillwater are the Mining Forum of SA, the Association of Mineworkers and Construction Union (Amcu), the Marikana women’s group Sikhala Sonke, and the Greater Lonmin Community.
They objected after the Competition Commission – which assesses large mergers prior to referring them to the tribunal for its decision – evaluated the merger and concluded that it was unlikely to raise significant competition concerns.
However, the commission emphasised that the merger could result in 3 188 jobs being shed, and a further 10 156 jobs being lost after the transaction. It also raised concerns about the impact that this would have on the Bapo Ba Mogale community and local small businesses. It recommended that the tribunal approve the merger, subject to a range of conditions aimed at addressing these concerns.
Speaking to City Press on the sidelines of the hearing, Amcu president Joseph Mathunjwa said the union was against the merger because it would create a monopoly that would not benefit the community and least of all, the workers.
“This merger is not going to help the community or employment. It is just going to help Sibanye have a monopoly in platinum and bring poverty to people,” Mathunjwa said, adding that Lonmin had turned the corner financially and did not need the takeover by Sibanye – and that Sibanye had ulterior motives.
“Sibanye is just after the processing plant. They don’t want to commit to capital investment in Lonmin’s K4 mine. They just want to mothball all these shafts and concentrate on the processing plant in order to pull out of the agreement they have with Anglo American’s processing plant, where they are paying heavily for processing their own ore.
“It is clear that it’s just a smash-and-grab measure by Sibanye not to benefit the community or anyone but [Sibanye CEO] Neal Froneman and his gangsters,” he said.
And Mathunjwa did not spare government for letting Lonmin get away with it SLP noncompliance.
“It had been left unattended by the government. From 2006 to date, they keep on giving excuses. The DMR is allowing these mines to do this. And it is going to be worse with the clarion call from the president ... We are still going to experience a huge problem as labour. It is going to be a jobs bloodbath.”
Sibanye spokesperson James Wellsted said the company did not object to conditions laid down by the commission as it would invest further in some projects.
“As agreed with the commission, we will invest further in certain projects and shafts if they make commercial sense, which may mitigate many job losses. So, the claim that it is a smash and grab is disingenuous,” he said.
Wellsted added that the processing division was an important component of the transaction.
“We see similar opportunities to unlock value for all stakeholders by creating sustainable businesses, as we did between Rustenburg and Kroondal,” he said.
The tribunal is scheduled to make a final ruling on the matter on November 23.
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