Presentation to the Portfolio Committee on the Mining Sector 17 October 2014

MINING IN SOUTH AFRICA Gold: South Africa mined gold production South Africa accounted for 15% of the world's gold production. Diamond: South Africa has been a world leader in diamond production. The primary South African sources of diamonds, including seven large diamond mines around the country. Platinum and Palladium: South Africa produces more platinum and similar metals than any other nation. Coal: South Africa is also a producer of coal 3 July 20152

Labour Market Governance The Basic Conditions of Employment Amendment Act of 1997: Sets floor rights in the labour market including the mining sector. The Labour Relations Amendment Act of 1995: Regulates orderly collective bargaining in the labour market. Parties cannot negotiate less favourable conditions than the floor rights set by the Basic Conditions of Employment Amendment Act. The Employment Equity Amendment Act of 1998: Deal with affirmation and discrimination in the labour market. The Mine Health and Safety Amendment Act of 1996: Regulates health and Safety in the mines. The Department of Labour inspectorate enforces the Employment Equity and the Basic Conditions of Employment Legislation. The Department of Mineral Resources inspectorate enforces health and safety in the mines. 3 July 20153

MIGRANT LABOUR SYSTEM AND SUBCONTRACTING Migrant labour system is still rife in the mining sector. These migrant workers were recruited from over 20 territories with main providers being Lesotho, the Eastern Cape within South Africa and Mozambique. The mistreatment of migrant workers has been the dominance of a handful of powerful, centralised mining groups which began to outsource non-production and production functions to a growing number of sub-contracting companies The use of these sub-contracting workers has been highest in the platinum sector In 2005, of a total of employees in the platinum group metals were outsourced, while in gold sector only of male employees were outsourced The mining houses tend to hire more vulnerable migrant workers particularly from Mozambique and Lesotho, and the trend of subcontracting has had a marked impact on trade union strength in the mining industry and led to a marked deterioration in wages, working conditions and underground safety 3 July 20154

MIGRANT LABOUR SYSTEM AND SUBCONTRACTING The extensive outsourcing in the platinum mines resulted in workers employed through labour brokers being paid much less than permanent workers. The sub-contracted workers do not receive benefits such as healthcare and housing. AngloPlatinum over 41% of its workforce is employed through labour brokers; about 30% at Marikana These labour brokers are used to circumvent aspects of the labour law, rendering union representation ineffective. The sub-contracted workers compete with permanent workers which creates conflicts as they take jobs of permanent employees, and are paid less. 3 July 20155

COLLECTIVE BARGAINING IN MINING There is no sectoral determination prescribing minimum wages and conditions of employment in the mining sector. Mining conditions of employment and wages are determined through collective bargaining Collective bargaining is fragmented: It is both centralized and non centralised Centralized collective bargaining: It is conducted by Chamber of Mines for Gold and Coal mines Non-centralised collective bargaining: It is conducted at company level at platinum and diamonds mines. Centralised bargaining covers 69% of gold mines employees and 36% of coal mines employees. Lack of uniform in collective bargaining creates different conditions of employment and wages in the sector which turns to be a source of conflict at times. 3 July 20156

TRADE UNIONS IN THE SECTOR Trade union nameMembership National Union of Mineworkers (NUM) United Association of South Africa (UASA) Association of Mineworkers and Construction Union (AMCU) Solidarity 3 July NUM is the largest trade unions in the mining sector. AMCU is the emerging trade unions in the mines. NUM is the major negotiating partner with the Chamber of Mines for the Gold and Coal mines AMCU is the major negotiating partner at company level in the platinum sector

EMPLOYMENT EQUTY IN MINING SECTOR EmployerTop ManagementSenior ManagementMiddle ManagementJunior Management African Rainbow Minerals 35.5%33.3%64.%92.7% Anglo American Platinum 37.5%41,1%56.7%70.7% Anglogold Ashanti37.5%32.8%49.5%52.6% Anglocoal44.4%32.9%53.2%68% Assmang Beeshoek0%57.1%42.9%59% De Beer Marine060%46.2%86.7% Exxarro Coal100%28.6%54.2%61.1% Exxarro Coal Mpumalanga 0%33.3%49.7%65.7% Goldfields South Deep0%10%43.7%65.6% Harmony54.2%44.4%45.5%58% BHP Billiton SA100%50%0%40% 3 July Employment Equity status refers to the levels of representativeness of the designated groups, i.e. black people (African, Indians and Coloured, women (all races) and people with disabilities (all races and gender)

EMPLOYMENT EQUTY IN MINING SECTOR EmployerTop ManagementSenior ManagementMiddle ManagementJunior Management BHP Billiton Coal0%50%52.5%65.6% Impala Platinum25% %74.2% Lonmin77.3%41.8%52.1%66.7% Sibanye Gold Kloofmyn0037.8%46.4% Sibanye Gold Driefontein022.2%4.8%52.9% GFI Mining036.4%39.1%49.8% X-Strata Coal15.8%35%54.2%75.2% Cullinan Diamond0% 46.9%48.3% Hillside Mining0%55.6%68.1%69.4% Hotazel Manganese0%33.3%45%72% Hermic Ferrochrome33.3%58.8%68.8%76.3% Middleburg Ferrochrome0%50.1%53.1%58% 3 July 20159

PRESENTATION OUTLINE 1.Breakdown of housing needs across income bands 2.Indication of where workers are staying 3 July

ANALYSIS OF HOUSING FOR MINE WORKERS IN THE 14 MINING TOWNS Living Out Allowance: 40% of total workforce on LOA in these SPP areas. Total workforce is July 2015 Briefing to the Select Committee on Labour and Public Enterprises 11 RegionNumber of employees on LOA CategoryIncome bands Amount (R) Free State (Matjhabeng) Cat 3 – Cat 8, all income bands (Harmony) R620 – R2 320 Gauteng (Westonarea, Randfontein, Mogaler City, Merafong) Miners, Officials and Management R1 820 – R3 600 Limpopo (Fetakgomo, Tubatse, Elias Motsoaledi, Lephalele) General worker – Management R1 100 – R7 160 Mpumalanga ( Emalahleni, Steve Tshwete) Contractors B1 – B7 R R7 532 North West (Rustenburg, Moses Kotane, Madikeng) Cat A – B7 C4 – C5 R1 769 – R4 622 Total

ANALYSIS OF HOUSING FOR MINEWORKERS IN THE 14 MINING TOWNS RegionNumber of Employees residing in hostels Free State (Matjhabeng)5 720 Gauteng (Westonasrea, Randfontein, Mogale City, Merafong Limpopo (Fetahgomo, Tubatse, Elias Motsoaledi, Lephalale 194 Mpumalanga (Emalahleni, Steve Tshwete)0 Note: All Anglo hostels dwelling were demolished to maker way for family and single quarters in Mpumalanga North West (Rustenburg, Moses Kotane, Madibeng) Total July

Number of employees staying in mine provided schemes (Single and Family Units) RegionNo. of Single / family units Built Free State (Matjhabeng)744 Gauteng (Westonarea, Randfontein, Mogale City, Merafong Limpopo (Fatakgomo, Tubatse, Elias Motsoaledi, Lephalale) 947 Mpumalanga (Emalahleni, Steve Tshwete)2 051 North West (Rustenburg, Moses Kotane, Madibeng) Total July

ANALYSIS OF HOUSING FOR MINEWORKERS IN THE 14 MINING TOWNS HOME OWNERSHIP RegionNo. of employees on home ownership scheme Free State (Matjhabeng)726 Gauteng (Westenaria, Randfontein, Mogale City, Merafong Limpopo ( Fetagomo, Tubatse, Elias Motsoaledi, Lephalale) Mpumalanga (Emalahleni, Steve Tshwete)6 952 North West (Rustenburg, Moses Kotane, Madibeng) Total July

CONCLUSION  Information indicate that majority of employees on Living Out Allowance are in platinum sector followed by the gold sector  This information will be reconciled into the migrant labour system  In view of the aforesaid challenge, the provision of accommodation should be the DMR working with Human Settlement, Should participate in the upcoming Housing Social Accord intended to strengthen intervention in this regard 3 July

THANK YOU 3 July