South Africa’s biggest union said a strike at Impala Platinum’s (Implats) biggest mine may spread to the entire company after wage talks broke down on Wednesday.
Workers at the world’s number two platinum producer, who had turned down the company’s latest pay offer and continued to strike, threatened to bring Implats’s entire operations to a halt after the company, in turn, rejected a fresh pay demand.
South Africa produces four-fifths of the precious metal, and Implats supplies 25% of the world’s platinum, mainly from its South African operations and mines in Zimbabwe.
The strike at Implats threatens to hurt investor confidence in a sector hard hit by the credit crisis, but has had little effect so far on the price of the metal used in jewellery and in catalytic converters to cut pollutants from car exhausts.
Platinum rose as high as $1 249,50 an ounce on Wednesday on the back of the strike, but closed down at $1 233 from Tuesday’s close of $1 239.
Eddie Majadibodu, the head negotiator for the National Union of Mineworkers (NUM) at Implats, said the strike at the Rustenburg mine — where more than 20 000 workers went on strike on Monday night — would spread to its other mines, refineries and other services as from Thursday.
”It’s bad, there is no agreement, the strike continues. All of Implats could go on standstill, it’s getting worse,” he told Reuters.
The pay talks broke down after the NUM demanded an increase of 14%, having rejected the company’s offer of 10%. Implats said the NUM’s demand was not negotiable.
”This is totally unacceptable,” Implats spokesperson Bob Gilmour told Reuters. ”It is more than double inflation. We are not going to negotiate on these terms.”
South African inflation is 6,7%.
Gilmour said 3 000 platinum ounces would be lost daily because of the work stoppage at Rustenburg, which produces about one million ounces of platinum a year.
Above-inflation pay settlements after strikes in other industries and sectors in South Africa, and threats of more stoppages, have added to concerns of inflation pressures. President Jacob Zuma has said union strike action was nothing more than part of the normal wage negotiations.
Analysts warn that pay settlements above inflation will fuel profit worries, and may jeopardise any recovery in Africa’s biggest economy from its first recession in 17 years.
The threat of a sector-wide strike appeared to recede after the NUM said workers at Anglo American unit Anglo Platinum, the world’s number one platinum producer, were likely to accept Anglo’s latest pay offer.
”I don’t think the strike at Implats will influence the situation at Anglo Platinum, given the fundamental difference in the pay structure of the companies,” NUM deputy general secretary Oupa Komane told Reuters.
The lowest paid worker at Implats earns R3 50 a month. Angloplat workers earn more than that, Komane said. — Reuters