But perhaps the quick new rise in the gold:platinum price ratio has been overdone given the amount of lost production to date, not just at Lonmin—and at Impala earlier in the year—but also at the other platinum mines in the Rustenburg area which have all been affected to some extent, as well as the potential for further loss of output ahead. Notably, the world's largest platinum miner, Anglo American Platinum (Amplats) has itself faced substantial disruption and had to temporarily suspend output for a few days and, perhaps more importantly, is still suffering in the fallout from the Marikana problems with militant miners blockading the streets and creating an atmosphere which is not conducive to their fellows returning to work. Indeed the company was reporting yesterday that only around 20% of its miners had turned up at three of its four mines in the area, with rumblings about possible even higher pay increase demands than those which faced Lonmin. Although Amplats is taking a hard line on work absences, in reality you can't just dismiss and immediately replace a large proportion of the workforce, which makes the tough statements almost unenforceable should miners stay away en masse—as Lonmin found to its cost.
But the mining companies cannot afford the kinds of pay increases being demanded. Amplats ominously stated yesterday "Anglo American Platinum's Rustenburg mining operations are already under considerable economic pressure and this illegal industrial action is making these operations even less viable."
There is still intimidation taking place in the mining townships in the area and the potential for it to spill over into more violent clashes between workers and police has not gone away—indeed it appears to remain at a high level. The potential for serious wage increase demands has also surfaced at the country's huge gold mining sector, but with South Africa no longer dominating world gold production in the way it does platinum output, the potential for disruption in the gold sector affecting that metal's price is far more limited.
What the Lonmin situation, and settlement, has done has let the genie out of the bottle. The substantial pay increases gained, even though well below the demands, will not have gone unnoticed by the other miners in the Rustenburg area and elsewhere and the potential for further pay-related walkouts in 'illegal' strikes remains high. The mining companies may have the law on their side over the strikes, but as the Marikana situation showed, a strike's 'legaility' can be totally irrelevant in the face of a determined workforce.
The union rivalry element too cannot be understated. Ostensibly the Lonmin settlements will be seen to have been achieved to a large extent by the actions of the relatively new AMCU union with the miners' traditionally dominant union, the NUM, initially completely bypassed. The mineworkers now seem to be being fed the line by the militants that the NUM has too cosy a relationship with both government and the mining companies and the latter union is already likely feeling the need to re-assert its dominance through itself becoming more militant and demanding ever steeper wage increases. The platinum mining sector will now almost certainly remain the hotbed for the inter-union struggle and increased workforce instability. The problems certainly ain't over yet!