Lonmin ‘unacceptable face of capitalism’

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Daily Maverick

THE company that preceded Lonmin was once dubbed “the unacceptable face of capitalism” by a British prime minister. Tiny Rowland, the man who turned the company into an international colossus, wore the slur happily. In the aftermath of the Marikana shootings, it seems like not much has changed since his day.

 

The deaths of dozens of people on August 16 has thrown South Africa into a frenzy of outrage, grief and soul-searching. President Jacob Zuma announced that the following week would be declared one of mourning. Over last weekend, the situation had calmed down at Lonmin’s Marikana shaft, close to where the shootings happened, but the dead had yet to be fully identified and a breakthrough to the deadly wildcat strike action had not been found yet.

 
Last Sunday, Lonmin issued an ultimatum to its employees: if they did not return to work on Monday, they could be fired summarily.

 
Lonmin has always battled with unions in South Africa, but this particular incident is a nightmare on a scale that it will never have seen before.
Roland “Tiny” Rowland was a British man (born Walter Furhop in India to German parents) who came to southern Africa in the aftermath of World War II to escape the heavy tax regime in England and to enjoy the higher standard of living that European colonialists enjoyed in Rhodesia (present-day Zimbabwe). He soon ingratiated himself well with African politicians.

 
The British Independent said: “He became a pillar of the social circuit in Salisbury, Southern Rhodesia — now Harare, the capital of Zimbabwe — earning his living as an upmarket car dealer. He soon discovered that his undoubted charm and dazzling smile worked well on African politicians eager for respectability and access to Western capital and know-how.”

 
In 1961 he was chosen to head the London and Rhodesian Mining Company (Lonrho) and quickly changed the way the company made money. He made the business depend heavily on his personal contacts and diversified swiftly. After that, he made some very risky calls on drawing up accounts, which spooked pension fund investors and lead to a commission of inquiry. The company then appointed non-executive directors to try to keep Rowland in check.

 

 

The certain fight came when he tried to hide certain financial information from the board and the directors tried to get the company shareholders to jettison the volcanic chairman. The decision went the other way instead. It cemented Rowland’s reputation as something of an escape artist. The pension fund investors immediately dumped Lonrho’s shares.

 
The British prime minister at the time, Edward Heath, disgustedly labelled Lonrho an “unpleasant and unacceptable face of capitalism”. Rowland famously replied that he didn’t want to be its acceptable face.

 
Lonrho’s dealings in Africa were often viewed with suspicion. He was often accused of helping out less-than-savoury regimes in various ways, especially at times when the thrust of global opinion was not particularly favourable.

 
“In the 1980s he was accused of helping the Marxist government of Mozambique manage its agricultural resources, and he increased Lonrho’s South African holdings while sanctions against the apartheid government were still in place,” the BBC said. “Then in 1992, Mr Rowland controversially sold a stake in some of Lonrho’s hotels to the Libyan leader, Colonel Muammar Gadaffi, only three years after the Lockerbie bombing which was attributed to Libyan terrorists.”

 
The board was especially stung by the Gadaffi revelation, and unseated him as chairman in October 1995. He was removed from the board of the company he had turned into a vast conglomerate the next year, and died in 1998.

 
At the news of his death, the eulogies from African leaders were extremely flattering. “He made an enormous contribution, not only to South Africa, but to the whole of Africa,” said former president Nelson Mandela, who had bestowed upon him the Order of Good Hope in 1996.

 
Two months before Rowland’s death, the company was split, and Lonrho Plc was created to handle the non-African businesses and mining assets. In 1999 the company changed its name to Lonmin and narrowed its portfolio to the platinum metal group in the Bushveld Complex of South Africa.

 
The company struggled continuously with unions, both in its North West and Limpopo operations. In May last year, the company sacked more than 9 000 workers at its Karee mine near Rustenburg — then reinstated them afterwards. That particular call was made after a wildcat strike spurred by an internal union power struggle.

 
The company’s current CEO, Ian Farmer, was appointed in 2008. According to Bloomberg Businessweek, the company paid him £1 220 629 (R15 860 000) in 2011. His pay that year was 293 times more than what rock drill operators working at Lonmin’s Marikana mine earn.
Unacceptable face of capitalism indeed, Lonmin.

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