Africa (Business)

Platinum firms mull pay plan after Amcu rejects govt proposal

Reuters, Bloomberg

Strike talks between government, platinum miners and Amcu are due to resume after reports the mineworkers' union rejected a pay offer by government.

Amcu's position appeared to dash hopes that new Mineral Resources Minister Ngoako Ramatlhodi who has thrown his weight behind mediation efforts. (Delwyn Verasamy, M&G)

The Association of Metalworkers and Construction Union (Amcu) rejected a government wage increase proposal aimed at ending a crippling five-month strike by platinum miners, the Business Day reported on Thursday.

Amcu’s position appeared to dash hopes that new Mineral Resources Minister Ngoako Ramatlhodi, who had thrown his weight behind mediation efforts, might be able to break the deadlock between the strikers and platinum producers.

“The government proposal was not a new proposal. They introduced [an old proposal] that has already been rejected by our members three months ago,” the newspaper quoted Amcu president Joseph Mathunjwa as saying.

He added the union was maintaining its demand for a salary increase to R12 500 a month.

Pay proposal
Meanwhile, platinum producers crippled by the strike asked for time to consider a pay proposal from the union before government-brokered talks resumed on Thursday.

Ramatlhodi met with chief executive officers from platinum producers in Pretoria on Wednesday, “during which a proposal from the Association of Mineworkers and Construction Union was presented”, the department said in a statement.

The strike by more than 70 000 Amcu members at Anglo American Platinum, Impala Platinum Holdings and Lonmin, the world’s three leading producers, has disrupted their mines since January 23. The minister is driving an effort to resolve the stoppage to limit further harm to South Africa’s economy.

Ramatlhodi “is taking the matters on the table very seriously”, Mathunjwa said earlier by phone. “At any time they could call us,” he said on Wednesday after addressing members at a stadium near Lonmin’s Marikana operations, about 120km north-west of Johannesburg.

“I am encouraged by the progress on this matter, and the co-operation of all parties involved,” Ramatlhodi said after meeting with the union on June 3. Lonmin, Anglo Platinum and Impala requested time to consider the Amcu proposal, and the meeting will resume on Thursday, the department said in its statement.

Economic blow
South Africa’s economy contracted in the first quarter for the first time since a 2009 recession as the walkout caused mining production to plunge by the most in 47 years. The companies say the strike has cost them R21-billion in lost revenue, while workers have forgone more than R9-billion in wages.

The strike that has hit 40% of global production of the precious metal used for emissions-capping catalytic converters in automobiles.

A wage deal discussed in the negotiations last week would benefit lowest-paid workers the most, according to two people familiar with the talks. Those with the lowest salaries would receive an increase of R800 a month every year for five years, said the people, who asked not to be identified because the information isn’t public.

The strike “will likely end within 10 days”, Mark Rosenberg, Africa director at Eurasia Group in New York, said in a note to clients on Wednesday. “A more credible intervention” by Ramatlhodi, a higher first-year wage increase for lower-skilled workers and a recent court victory for producers “are driving an end” to the walkout, he wrote.

Unions’ demand
The Labour Court this week threw out an application by Amcu to bar the companies from communicating directly with workers about their latest pay offer.

The union is on strike over its demand for basic monthly pay excluding benefits for entry-level underground employees to be more than doubled to R12 500 by 2017. South African inflation was 6.1% in April. The last offer made public by producers amounted to increases of as much as 10% a year.

Mathunjwa said the purpose of addressing members who packed a stadium at Lonmin’s operations on Wednesday was to convey a May 28 Labor Court order declaring that picketing rules must be followed. The union’s wage demand remains unchanged, he said. – Reuters, Bloomberg

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