Going Platinum: Lonmin and the Marikana

The precious metal platinum is what catalytic converters use to convert the toxic by-products of petrol combustion to something less poisonous.  Platinum is not easy to find in the Earth’s crust and 80% of it is found in South African nickel and copper mines.  One of the earlier companies to see the value in these mines was Tiny Rowlands’ Lonrho. Rowlands was a classic self-made 20^th century capitalist who turned Lonrho from an obscure farming and mining company into a multinational conglomerate.

Rowlands had no compunction with dealing with apartheid era South Africa for which hypocrite Prime Minister Ted Heath called Lonrho “the unacceptable face of capitalism." But while Rowland was making enemies in London, he knew how to do business in Africa. He made many friends among black African leaders including Nelson Mandela, Kenneth Kaunda and Muammar Gadhafi. When Mandela came to power, he didn’t throw out Lonrho but instead bestowed on Rowlands South Africa’s highest honour the Order of Good Hope in 1996. 

By then Rowlands was on the outer at Lonrho after he financed a film exonerating the Libyans of Lockerbie.  In 1999 Lonrho refocussed on its mining core business and renamed itself as Lonmin. The focus of that mining was the wealthy Bushveld Complex of northern South Africa around Johannesburg, home to the world’s largest collection of platinum group metals. It was a money-spinning venture as platinum prices soared. Xstrata saw the value and bought up 30% of the company. Of the 245 tonnes of platinum sold in 2010, almost half was used for vehicle emission control devices.

But by then the bottom was starting to fall out of Lonmin’s market. In March 2008 the global financial crisis was about to strike and platinum was one of the first casualties. The price started to plummet. Lonmin were never big fans of unions and suffered constant safety stoppages because of accidents, numerous labour strikes, and unplanned plant and equipment shutdowns. Yet they were also protected by an ANC-backed National Union of Mineworkers whose leader Cyril Ramaphosa ended up on the board of Lonmin.

But as the NUM flirted with management, its membership fled to more radical unions. There was also simmering resentment from locals who felt they were not getting their fair share of the mining boom. Social welfare organisation Bench Marks Foundation said low wages and social disintegration, crime, murder, rape and prostitution, unemployment and poverty amid the third richest platinum mine in the world, created an incubator rife for worker and community discontent.

On August 16, Lonmin shares plummeted 7 percent on news an illegal strike had paralysed all its South African operations. At its flagship operation in Marikana near Rustenburg, 100km north of Johannesburg,  Lonmin threatened to sack 3,000 rock drill operators if they fail to end a wildcat pay strike.  Clashes between unions claimed nine lives, including two police officers. 

Jeffrey Matunjwa of the Mineworkers and Construction Union defended the strike action. He told Al Jazeera they couldn’t stand by while bosses and senior management were getting fat cheques. "And these workers are subjected to poverty for life,” Matunjwa said. He said despite 18 years of post-apartheid democracy, most of the 28,000 mineworkers were still earning $360 a week “under those harsh conditions underground."

Matters came to a head on August 16. Members of an elite South African police unit were called into Marikana. They opened fire killing 34 strikers and wounding 78 others.  It was the largest single massacre on South African soil since Sharpeville in 1960 and a bloody reminder South African police had never departed from their apartheid-era role “as the brute enforcer of state power.” 

Police claim the strikers shot first, for which there is some evidence and many strikers were armed. But there is also evidence the return fire from police wasn’t indiscriminate. The Daily Maverick  estimated the majority of those who died were killed beyond the view of cameras at a nondescript collection of boulders some 300 metres away from the protest. They said heavily armed police hunted down and killed the miners in cold blood.

The only charges laid have been against 270 strikers initially charged with public violence and later murder. These charges were laid under the doctrine of ‘common purpose”, an apartheid era conceit kept by the new rulers.  Their lawyers write to Prime Minister Zuma saying it was inconceivable the strikers would have killed their own people.  Last Sunday the Director of Public Prosecutions for the North West dropped the common purpose charges.  They didn’t explain why but defended the initial decision on “a sound legal principle” and a “prosecution duty” to go for the highest charges. 

Yesterday a court released 100 of the 270 miners as most of the unions signed a peace pact with a Lonmin desperate to rid itself of the unwanted international attention. One union and non-union workers have not signed up to the deal so it remains a worrying time.  Lonmin has been losing 2,500 ounces of daily production since the strike started a month ago. With the price of platinum recovering since July to the point where only silver has gained more this year among precious metals, every day of lost production is costing them a lot of money.  The company will be looking for its state links to do whatever it takes to get their mines operational again.

Landmines and Lonrho

A South African and a British company have come together to develop a project for land mine clearance. The companies are Lonrho and Countermine and they have proposed a joint venture agreement to develop opportunities for land mine clearance. The environment will be sub-Saharan Africa in order to rehabilitate previously unusable land. Lonrho will provide the funding and its extensive African business network to build the African arm of Countermine’s land mine clearance business.

Anti-Personnel mines cause up to 20,000 casualties every year across the world. Large tracts of the world’s land are rendered unable by landmines. Even the suspicion of landmines is enough to keep humans away from land. The Lonrho/Countermine joint venture aims to reclaim this land. Lonrho will provide the finance and Countermine will provide the hardware. Countermine’s selling point is a product called ORACLE (Obstacle Removal and Clean Land Equipment). Developed in partnership with the American Caterpillar company, ORACLE works as a sort of giant armour-plated plough. It traverses fields tilling the ground to a depth of 50cm as it goes along. The machine uses a massive sharp-toothed rotor to shred mines before they go off. And even if they don’t go off, they are smothered.

Countermine has experience in the field. In 2000, it won a contract from the Croatian Government to clear landmines from Croatia after the war with Serbia. Countermine says ORACLE adheres to the International Mine Action Standard (IMAS). IMAS are an evolving set of standards in force for all UN mine action operations since 2001. This work is co-ordinated by the Geneva International Centre for Humanitarian Demining (GICHD).

Anti-Personnel mines are often deliberately designed to injure rather than kill. Medics will be required; the injured will have to be evacuated. That way, they increase the logistical support burden on the opposing force. The 1997 Mine Ban Treaty (also known as the Ottawa Convention) compels 155 signatory countries not to manufacture, stockpile, transfer or use anti-personnel mines. However, as the cost of making a mine is US $2, while removing it costs US $1000 per mine, there are many notable omissions: the US, China, Russia, Israel, Iran, Iraq, Saudi Arabia and Vietnam, are all outside the treaty.

Under Clinton, the US refused to sign up unless it gained an exception to protect its troops in South Korea. However he did pledge to sign the Treaty by 2006. When Bush came to power, his administration initiated a review of U.S. landmine policy. That review concluded it was not in US interest to sign the treaty and the vague Clinton commitment was completely abandoned.

Landmines remain a staple of war on Earth. And their impact lasts long after hostilities have ceased. Almost 20 years after the Iran-Iran war, Iran still has 4 million hectares containing landmines. These mines are not only on the borders; some are planted inside Iranian cities. On average 2-3 people are injured or killed by landmines every day in Iran.

For now the joint venture is concentrating on Africa. Most African countries have signed up to the Ottawa Convention yet Africa is the most heavily land-mined continent in the world. There are at least 40 million mines and 140 million people live in countries where the risk of encountering mines is high or very high.

The most severely affected countries are ones that have all experienced post-colonial wars: Angola, Chad, Eritrea, Liberia, Mozambique, Rwanda, Somalia, Sudan and Uganda. The desert countries Egypt, Libya and Tunisia have also minefields dating back to World War II. In total, landmines kill or injure over 12,000 people per year in Africa.

And at first glance Lonrho seems an unlikely partner for this venture. They were once described by Edward Heath as an “unpleasant and unacceptable face of capitalism”. Heath made the comment in parliament in 1973 when he was Prime Minister. Then under the remarkable tutelage of Roland “Tiny” Rowland Lonrho ran into trouble for violating sanctions against white Rhodesia. Lonrho were not the only sanction-busting British company, but only the company of the German Rowland (birth name: Roland Walter Fuhrhop) suffered the consequences.

But while Rowland was making enemies in London, he knew how to do business in Africa and he made many friends among Black African leaders including Nelson Mandela and Zambia’s Kenneth Kaunda. Rowland sold a controversial stake in Lonrho in 1992 to Libyan leader, Colonel Gaddafy, while Libya was being accused of the Lockerbie bombing. In 1994, Rowland financed a film “The Maltese Double Cross – Lockerbie” which disputed Libyan involvement in the bombing.

That same year Rowland was forced out of the company he had managed for 32 years. Commodity prices had slumped and the company's debts threatened profitability. The company was split into two: Lonmin and Lonrho Africa, the latter retaining all the African businesses and mining assets. While Lonmin thrived and is now worth $US 8 billion, Lonrho Africa stalled. In 2005, David Lenigas was appointed as an ebullient CEO and co-chairman with a brief to restore Lonrho Africa as a first port of call for investment in Africa.

Lenigas is quickly rebuilding the business and diversifying into hotels and casinos. He was typically upbeat about the new deal with Countermine saying the partnership will add value to Lonrho’s growth strategy. He was also quick to point out that “by rehabilitating large areas of valuable land we will make a significant difference to African communities that have suffered terribly as a result of landmines”. Lenigas is hoping the ORACLE will provide a match between profits and philanthropy.