the evolution of the mining industry - a comparative trend in relation
Transcription
the evolution of the mining industry - a comparative trend in relation
THE EVOLUTION OF THE MINING INDUSTRY - A COMPARATIVE TREND IN RELATION TO THE SOCIO-ECONOMIC DEVELOPMENT AND THE UGLY REMUNERATION DISPARITIES – PERSPECTIVE OF GHANA MINEWORKERS’ UNION OF TUC (GHANA) Mr. Prince William Ankrah, General Secretary of GMWU By the Office of the General Secretary, Ghana Mineworkers' Union of TUG (Ghana) [email protected] Overview Ghana started mining over 100 years ago. Our peers in the mining industry in the developed countries rode on the back of mining receipts to develop their economies. Notable among these are the popular American, Australia and the South African examples. The California example is by all standards the envy of the world. Mining transformed the Californian economy drastically moving it from the most sparsely populated state in America to the most populous one in recent times mainly due to the foresight of successive leadership and the governance structure of the United States of America in ensuring that the economic fortunes of California was sustained beyond mining. It is therefore not surprising that, California as a state is classified the eighth largest economy in the world according to the Center for Consulting Study of the California Economy in 2012. This did not happen per chance but rather as a result of a well thought-out plan envisaging into the future that placed it in such a niche position. The American situation became popularly known as the ‘California Gold Rush’ and South Africa also experienced a period of gold rush which bolstered its economy to the present levels. Australia over the last 25 years generated almost 250 billion US dollars from mining which has really helped the Australian economy to build the needed resilience to withstand any shocks. It was not surprising to global economic watchers that Australia escaped the debilitating impact of the 2008/9 financial crisis that crippled major economies around the globe. Indeed, one fundamental thing which escaped most analysts is the stability that has been created over the years in the Australia economy; a strategy rooted in its job market, particularly in its mines where competitive remuneration is put on both nationals and nonnationals (including Ghanaian nationals) who receive appropriate skill-based remuneration. The Australian government is able to generate huge tax revenues as pay-as-you-earn from the competitive skill-based salaries of its workers. This coupled with proper management of mining receipts has kept its economy going where other similar economies have fallen and are struggling to recover. In this regard, a national debate as to how mining has benefited our country becomes urgently imperative. We need to use this platform to hold government accountable and demand a roadmap meant to make mining and for that matter the extractive industry more beneficial to our economy. A stitch in time saves nine approach, in our view should be the impetus towards Page 1 this realization. It is unfortunate that the situation in the mining sector of Ghana leaves so much to be desired. After years of exploitation, our visionary first president Dr. Kwame Nkrumah took over the mines and placed them in the hands of Ghanaian management. Indeed, most of those mining companies were virtually declared non viable by our colonial masters. However, their operations were sustained for several years until we witnessed the diversification of most of the state owned enterprises. It also offered many young Ghanaians domiciled in those catchment areas a source of employment and livelihood. To an extent, the mines did virtually cater for the infrastructural development of these townships. Disappointingly, mining townships are in the league of the unplanned ones in our country. They therefore become ghost towns beyond mining. Akwatia, Bibiani and Prestea, among others have had their share of total neglect after mine closures. The recent Obuasi panic that engulfed our nation emanating from AngloGold Ashanti's decision to reposition the Obuasi mine with its associated redundancies heightens the need for sustainable and alternative future of such mining driven local economies. Tarkwa/Bogoso at the moment have six mining companies operating within their catchment areas but still have haphazard developmental patterns and huge infrastructural deficit. These pointers are factually at variance with the mining flagship economies described in this article. Hitherto, incomes in the mining sector were so low that most of the indigenes of the mining towns did not want to take up jobs in the mining industry. Hence, the industry relied heavily on our brothers from the northern part of the country for its labour. These ex-miners, who hardly had any decent remuneration at the time the industry was under the control and management of the state, retired as paupers. The New Era of Mining In the mid 1980s, when the Rawlings led administration introduced the Structural Adjustment Programme (SAP); the sector became the leading foreign direct investment (FDI) attraction into the Ghanaian economy. This saw the influx of private mining companies such as Bogoso Gold Resources, Cluff Mining, Golden Ray among others which subsequently paved the way for global mining conglomerates like GoldFieds, AngloGold Ashanti, Newmont Ghana Gold, Adamus Mining, Perseus Mining etc into the industry. The influx of global mining capital into Ghana’s mining sector came with it massive numbers of expatriate staff from different parts of the world. Around the same time, the workforce led by the Ghana Mineworkers’ Union of TUC (Ghana), decided to change their destinies by pursuing policies and strategies aimed at improving their living standards. The Union succeeded in getting its members’ salaries indexed to the US dollar. This initiative was supported by two key visionary leaders (President Jerry Rawlings and Sir Sam Jonah). The indexation was done against the backdrop that the commodity in Page 2 trade was dollar denominated coupled with the fact that mining costing is done in the United States dollars. Again, in 2010, the Union instituted another strategy known as ‘Agenda $500’. This was a medium term strategy by the Union to move the minimum salary in the mining industry from an estimated $270 per month to $500 per month by 2013 in a bid to start addressing the huge salary disparity within the sector. These two flagship strategies, coupled with a very detailed collective agreement benefits have not only marginally improved the lives of mineworkers in the last decade but have also created a relative peaceful industrial atmosphere in the mines compared with other sectors in the country. The Mining Sector Human Capital Advantage (Home Grown) It is worth stressing that, Ghana positioned itself well ahead of its peers in the Sub Region, in terms of the human capital development to feed its mining sector. The first mining training institution (Tarkwa School of Mines now University of Mines and Technology UMaT) was established in Tarkwa in the Western Region to develop mining related skills necessary for the sector. The nation also sponsored others to be trained in the prestigious Camborne School of mines in UK, among others. Our traditional universities also complemented by training other engineering and ancillary staff to feed the sector for efficiency and growth. It is worth commending the state-owned mines including the then Ashanti Goldfields Company Limited for the huge investments made in this direction. As the industry grew across the world, skills became scarce in key mining countries such as Australia, Canada, United States, Indonesia, South Africa, Mali, Guinea etc. Consequently, mining labour market pricing assumed a global dimension and debate. Appropriate market values were placed on mining skills across regions where remuneration systems were governed by skills and equity principles. In other words, remuneration systems were based on skills and competencies as against the notion of purchasing power parity and colour. The Global Remuneration Scale The following tables developed from data put together by miningglobal.com, a renowned body that does research on the global mining industry gives a vivid picture of the salary scales of various mining skills at the global mining environment. UPPER RANGE Skill/Job Title Annual Rate (US$) Monthly Rate (US$) 1 Project Director/Drilling Operations Director 400,000 33,333 2 Project Controls and Site Managers 350,000 3 Engineers 240,000 No. Page 3 Daily Rate (US$) Hourly Rate (US$) Exch. Rate Cedi Equiv. (Monthly) 1,235 154 3.82 127,183 29,167 1,080 135 3.82 111,285 20,000 741 93 3.82 76,310 4 Geologists 230,000 19,167 710 89 3.82 73,130 5 Metallurgists 220,000 18,333 679 85 3.82 69,951 6 Geophysicists 200,000 16,667 617 77 3.82 63,592 7 Occupational Health Safety & Env. Professionals 190,000 15,833 586 73 3.82 60,412 8 Mine Supervisors/Mill Superintendents 168,000 14,000 519 65 3.82 53,417 9 Surveyors 165,000 13,750 509 64 3.82 52,463 10 Operators/Technicians/Miners 150,000 12,500 463 58 3.82 47,694 Hourly Rate (US$) Exch. Rate Cedi Equiv. (Monthly) No. Skill/Job Title MIDDLE RANGE Annual Monthly Rate Rate (US$) (US$) Daily Rate (US$) 1 Project Director/Drilling Operations Director 400,000 33,333 1,235 154 3.82 127,183 2 Project Controls and Site Managers 275,000 22,917 849 106 3.82 87,439 3 Engineers 155,000 12,917 478 60 3.82 49,284 4 Geologists 140,000 11,667 432 54 3.82 44,514 5 Metallurgists 135,000 11,250 417 52 3.82 42,924 6 Geophysicists 125,000 10,417 386 48 3.82 39,745 7 Occupational Health Safety & Env. Professionals 120,000 10,000 370 46 3.82 38,155 8 Mine Supervisors/Mill Superintendents 119,000 9,917 367 46 3.82 37,837 9 Surveyors 110,000 9,167 340 42 3.82 34,975 10 Operators/Technicians/Miners 100,000 8,333 309 39 3.82 31,796 Hourly Rate (US$) Exch. Rate Cedi Equiv. (Monthly) No. Skill/Job Title LOWER RANGE Annual Monthly Rate Rate (US$) (US$) Daily Rate (US$) 1 Project Director/Drilling Operations Director 400,000 33,333 1,235 154 3.82 127,183 2 Project Controls and Site Managers 200,000 16,667 617 77 3.82 63,592 3 Engineers 70,000 5,833 216 27 3.82 22,257 4 Geologists 50,000 4,167 154 19 3.82 15,898 5 Metallurgists 50,000 4,167 154 19 3.82 15,898 6 Geophysicists 50,000 4,167 154 19 3.82 15,898 Page 4 7 Occupational Health Safety & Env. Professionals 50,000 4,167 154 19 3.82 15,898 8 Mine Supervisors/Mill Superintendents 70,000 5,833 216 27 3.82 22,257 9 Surveyors 55,000 4,583 170 21 3.82 17,488 10 Operators/Technicians/Miners 50,000 4,167 154 19 3.82 15,898 Data Source: http://www.miningglobal.com/top10/1103/TOP-10:- Highest-Paying-Jobs-in-the-MiningIndustry Detailed explanation on the tables is found in Robert Spence’s article titled TOP-10:- HighestPaying-Jobs-in-the-Mining-Industry. Comparing the global skills-based remuneration to what pertains in our industry in Ghana for the same skills will be tantamount to comparing ‘charcoal to gold’. The pay levels of these skills are too low to the extent that it is fueling massive skills flight from the industry especially the very experienced and highly competent professionals to regions where they are better remunerated. At times one wonders if it is another strategy of the neoliberal machinery. A typical example is a twenty-five year old high-school dropout James Dennison from Western Australia makes US$200,000 a year running drills in underground to extract gold and other minerals. According to John W. Miller, a columnist for the Wall Street Journal, in an article titled "The $200,000-a-Year Mine Worker: Resources Boom Fuels Demand for Underground Labor, Spurs Skyrocketing Pay" “the heavily tattooed Mr. Dennison who started in the mines seven years ago earning US$100,000, owns a sky-blue 2009 Chevy Ute, which cost $55,000 before a $16,000 engine enhancement, and a $44,000 custom motorcycle. Miller continues to state that Mr. Dennison belongs to a class of nouveau niche rising in remote and mineral-rich parts of the WORLD, such as Western Australia State, where mining companies are investing heavily to develop and expand iron-ore mines. Demand for those willing to work 12-hour days in sometimes dangerous conditions, while living for weeks in dusty small town, is huge. Page 5 John W. Miller/The Wall Street Journal - James Dennison poses by his car The dangerous conditions under which Mr. Dennison works are not different from the Ghanaian mineworker who even works under harsher and more severe environments. Regrettably, the Ghanaian mineworker is paid a pittance under the pretext of purchasing power parity logic perpetuated by neo-liberal ideologists. An argument which in the opinion of the Ghana Mineworkers Union does not hold water and can be described as bankrupt, to say the least. Skills Shortage It is, therefore, not surprising that most of the key mining skills in Ghana seize the slightest opportunity to secure job offers in the mining rich countries and join the cream of well paid colleagues in these countries mentioned above. The resultant effect is such that, if the mining industry in Ghana had sought to poach some of them back home and placed international market values on them, the reward landscape in the industry would have changed positively. The issue that calls for debate is do we need to use union pressure to compel the mining companies to pay what will lead to skills retention in Ghana with its attendant revenue stream by way of PAYE into the national coffers? The answer is obviously YES because such prompting debates are not meant for the faint hearted and docile trade union organization. It requires well thought-out research underpinned by other internal sources of information to challenge the status quo. The global mining skills shortage has already caught up with us and if immediate measures are not taken to reverse the trend, we will soon run into critical skills shortage. To buttress the Page 6 mining skills shortage situation, Sigurd Mareels, director of global mining for research firm, McKinsey and Co. reiterated that “the situation is not just in Australia but around the world. He cited Canada as an example, where the Mining Industry Council foresees a shortfall of 60,000 to 90,000 workers by 2017. He emphasized that Peru must find 40,000 new miners by the end of this decade. The Minerals Council of Australia estimates that the country will need an additional 86,000 workers by 2020 to complement the current workforce estimated at 216,000. The reality is that, Ghana becomes the center of attraction with its attendant challenges if actors fail to address the issue. Indeed Australia is ahead of its peers in ensuring fairness in remuneration between nationals and non-nationals. For example, nationals of Philippines and New Zealand who work in the mining sector in Australia as grader drivers at Port Hedland in Northern Australia who fly home once a month on a $1,200 ticket paid by themselves out of their annual income of $120,000 argue that it makes sense because they earn their market value. The most irritating and worrying situation in Ghana is that the expatriate staff and a selected few local top management staff have been placed on the global competitive scales in addition to share options meant to enhance their financial fortunes and also to serve as a retention strategy. Whereas the majority (made up of middle level senior and junior staff) whom the Union represents, have been subjected to a race to the bottom remuneration agenda. Consequently creating disaffection and a growing alienation among the workforce. The economic reality is that, majority of those who when placed on their appropriate skills will contribute heavily to our national purse through PAYE and also create the needed spending in the mining economies with its impact on national economy are rather denied their due. The Union has all the data relating to these salary inequities in the mining industry in Ghana and will not hesitate to put it in the public domain. The following tables give a gist of the salary disparity situation in the mining industry in Ghana. Table 4: Lower and Upper Pay Ranges in the Mining Industry of Ghana in US$ LOWER RANGE Hourly Exch. Rate 1,373 172 3.82 141,491 7,000 259 32 3.82 26,709 1,250 46 6 3.82 4,769 583 22 3 3.82 2,226 Hourly Exch. Rate CLASS Annual Monthly Expats/SVPs, EVPs, Executive Managers 445,000 37,083 Managers, Project 84,000 Senior Staff 15,000 Junior staff 7,000 Daily Cedi Equiv. (Monthly) UPPER RANGE CLASS Annual Monthly Page 7 Daily Cedi Equiv. (Monthly) Expats/SVPs, EVPs, General Manager 670,000 55,833 2,068 258 3.82 213,032 Management 180,000 15,000 556 69 3.82 57,233 Senior Staff 24,500 2,042 76 9 3.82 7,790 Junior staff 11,700 975 36 5 3.82 3,720 Source: Ghana Mineworkers' Union (TUCG) 2015 Key EVP: Executive Vice President SVP: Senior Vice President From the table 4 above, it is evidently clear that the only class of employees in the industry that matches the global mining pay benchmark is the expatriates and the few privileged top Ghanaian managers. Whereas their lower range annual pay fits clearly in the benchmark, their upper range even exceeds the global benchmark. It must be emphasized that the data used in this analysis is only gross pay data which does not include share options and other inbuilt perks which together create a comfortable haven for those at the upper echelons of the industry. Interestingly, the case for the middle and operation level (senior and blue colour unionized staff) is not only far below but completely outside the benchmark data. The senior and junior staff who are the class of employees mostly used in the global benchmark i.e. metallurgists, drillers, geologists, excavator operators etc are glaringly shortchanged in every sense. For instance, whereas an entry level metallurgist in the global benchmark annual pay is $50,000, his Ghanaian counterpart takes $15,000 representing only 30% of the benchmarked data. The Union’s Position The Union strongly believes that this glaring inequity cannot be entertained and is poised to use a mature approach to address such naked exploitative tendencies in the industry over time, although the situation requires instant rectification. The industry faces turbulent times if it fails to recognize the need to collaborate with the Union to develop a roadmap towards addressing this ugly situation. Our approach will be to ensure that all jobs fragmented at the moment are well graded and delayered. This is to ensure an efficient and more productive industry with the appropriate international values placed on every employee irrespective of his/her nationality or colour. Page 8