Tags: platinum | mines | strike | South Africa

Platinum Mines' Union Bypass May Disrupt Industry, AMCU Says

Monday, 05 May 2014 10:03 AM

The main union at the South African operations of the world’s largest platinum companies said the producers’ decision to take a pay offer to workers directly to end a 14-week strike may destabilize the industry.

“We fear that it could result in a very unstable environment because you’re dividing into two parts” should shafts be opened for miners to return, Association of Mineworkers and Construction Union President Joseph Mathunjwa told reporters in Johannesburg.

Anglo American Platinum Ltd., Impala Platinum Holdings Ltd. and Lonmin Plc ended talks April 24 and decided to put their latest pay offer directly to workers, using text messages and radio commercials. The strike by more than 70,000 AMCU members since Jan. 23 has cost the companies almost 16.4 billion rand ($1.6 billion) in lost revenue and employees 7.3 billion rand in income, the platinum producers said on a joint website.

The AMCU has rejected the companies’ latest offer of 12,500 rand a month by 2017 including benefits, instead demanding that amount in base pay within four years. That’s double entry-level workers’ current salaries.

The AMCU will “flex its muscles” to make sure that companies don’t close shafts because of the stoppage and will call a “mass solidarity strike” if that happens, he said.

Inflated Numbers

Amplats plans to switch to mechanized open-pit mining from labor-intensive underground excavation as most of its South African operations remain crippled by the strike. The company closed shafts and cut jobs last year and has said it’s considering whether to sell strike-hit mines.

Amplats said in negotiations that it had a budget of 1 billion rand a year for wage increases, according to Mathunjwa. The number of employees used by Amplats was almost 5,000 workers higher than the actual number, inflating wage-increase costs by as much as 500 million rand, he said.

“This engagement exposed that the employers, in particular Amplats, can actually afford the AMCU demands and the different positions were within negotiation range,” Mathunjwa said. Impala and Lonmin wouldn’t disclose any data on their costs, according to the union.

Talks Standstill

Negotiations between the sides are at a standstill as companies have appealed directly to employees about accepting their offer.

No meeting has been scheduled with the union, Charmane Russell, a spokeswoman for the producers at Russell & Associates, said in an e-mailed response to questions.

Impala probably won’t “have a clear picture” of how many employees would like to accept the pay offer until May 8, spokesman Johan Theron said by phone.

Lonmin has sent text messages to miners, giving them until the same date to decide on returning to work by May 14, according to spokeswoman Sue Vey.

Amplats declined to comment on detailed attendance numbers, communications initiatives, or progress made in contacting employees so as “to reduce the risk of intimidation and violence,” Mpumi Sithole, a spokeswoman for the world’s biggest platinum producer, said in an e-mailed response to questions. “Updates will be provided to the market at critical junctures.”

Potential Intervention

The government may have to intervene in the negotiations to help reach a resolution, President Jacob Zuma told reporters in Johannesburg today.

The protest “has gone on for too long and is not helping the workers,” he said.

South Africa’s ruling African National Congress has no relation with the AMCU, making it difficult for the party to intervene from a political perspective, Enoch Godongwana, the head of the ANC’s economic policy committee, said in Johannesburg today.

The mining companies need to “draw a line and to ask the government to protect their employees,” he said.

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The main union at the South African operations of the world's largest platinum companies said the producers' decision to take a pay offer to workers directly to end a 14-week strike may destabilize the industry.
platinum, mines, strike, South Africa
Monday, 05 May 2014 10:03 AM
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