Palabora Copper Dampens Down Employment-Related Unrest In Limpopo

Tuesday, 11 August, 2015

“Palabora strives to be an ‘employer of choice’” says the strapline on Palabora Copper’s website.

“That means attracting, optimising and holding top talent for long tenure because employees choose to build their careers with us.”

That’s the theory at least.

In practice, as with most mining companies in South Africa, things are a little bit more complicated.

In recent weeks the company’s employment practices have been drawn into the spotlight by violent protests that broke out in the vicinity of its mine and refinery in Limpopo province.

The protestors belong to the local Ba-Phalaborwa community who say Palabora Copper is not providing enough employment opportunities.

Jobs for local people is invariably a key issue when it comes to the successful management of community and social relations, but in this case the situation is complicated by the additional factors of rumour, and a new culture still bedding in a Palabora Copper itself, following a change of ownership.

Palabora is South Africa’s only producer of refined copper, taking ore from its underground mine and then concentrating, smelting and refining it to deliver around 43,000 tonnes of the metal per year into predominantly local markets.

The company has been in existence since 1956 and was for many years a joint venture between Rio Tinto and Anglo American.

However, in July 2013 the company was sold to a consortium that included the South African Industrial Development Corporation, a well-known backer of mining projects, and China’s Hebei iron & Steel Group.

This consortium professes itself committed to the “ongoing sustainable management of Palabora”.

But the Ba-Phalaborwa people would beg to differ.

To make their point at they’ve blocked South Africa’s Highway R71 more than once, setting tyres and vehicles on fire, and causing the closure of schools and shops.

A police spokesperson described the situation as “volatile and tense” as protests at the mine continued.

And Palabora itself felt the pain almost immediately.

“They have blocked the buses”, said a mine spokesman. “We are unable to ferry employees from and to work. We are losing between R25 million and R27 million rand a day in revenue.”

He added that the mine was running on a skeleton staff and that it was not producing copper as it should.

South Africa is no stranger to direct action as a political tactic, and long-term mining industry watchers will perhaps not have been surprised by the rapidity of the response.

Palabora said that the Ba-Phalaborwa were trying to tell the company who it could and could not employ and argued that sustained action could ultimately lead to the closure of the mine itself, and with it all the destruction of all associated employment opportunities.

On the flip side, Palabora said it had spent around R160 million on community projects since 2010 and that this year it would be spending a further R10 million in spite of the tougher economic conditions imposed by the weakened copper price.

What’s more, Palabora continues to focus on developing a local supply chain and now uses 30 local companies as part of that effort.

“Between January-May 2015 we have spent over R30 million with these locally black owned companies in the programme”, said the company in a prepared statement.

But perhaps the crucial factor is that Palabora has actually created 325 jobs for the local Ba-Phalaborwa people out of 600 available jobs, and the company continues to call for CVs from local tribal units of Ba-Phalaborwa.

It was perhaps a recognition of this last point that lead, eventually, to the subsiding of the violence to the current level of calm that now prevails.

Palabora Copper said that it had hosted a “multi-stakeholder consultation meeting” and that with the help of the NUM, COSATU, and other interested parties an agreement had been reached.

Whether the agreement will hold is another matter. On its website Palabora is unequivocal in its statement of intent: “Our goal is to build enduring relationships with the Ba-Phalaborwa”, says the company literature. “These relationships are characterised by mutual respect, active partnership and long-term commitment.”

We shall see.