/ 23 April 2014

Platinum talks seek to end longest South African mine strike

Amcu platinum workers have been on strike since January 23.
Amcu platinum workers have been on strike since January 23.

The world's three largest platinum producers are again meeting with union officials to try to end South Africa's longest mining strike after talks on Tuesday following an increased pay offer failed to break the three-month deadlock.

The Association of Mineworkers and Construction Union (Amcu) is due to resume discussions with Anglo American Platinum, Impala Platinum Holdings and Lonmin Plc, said Charmane Russell, a spokesperson for the producers at Russell & Associates in Johannesburg. Amcu President Joseph Mathunjwa said there was nothing to report from Tuesday's session.

The revised pay offer fails to meet union demands, suggesting a resolution may be weeks away, according to JPMorgan, Cazenove and Investec Asset Management. The platinum companies say the South African strike has cost them R14.4-billion in sales, and workers R6.4-billion in wages.

"It is clearly the biggest private sector strike and far and away the biggest mining sector strike" in South Africa, said Andrew Levy, who heads his own labour research company and advises multinationals.

Amplats and Impala last week proposed raising the cash portion of wages including bonuses and living allowances to R12 500 a month by 2017, or as much as 10% annually, from 9% before. That's short of the union demand for monthly basic pay excluding cash bonuses of R12 500 within four years. South Africa's inflation rate was 5.9% in February.

Longest strike
Amcu leadership last week wasn't happy with the companies' proposals, complaining that they fell "far short" of its demands, Impala spokesperson Johan Theron said on Tuesday.

The strike is the longest for the South African mining industry, said Chamber of Mines chief negotiator Elize Strydom, whose body represents producers. A gold strike in 1987 by 200 000 workers lasted three weeks, while about 80 000 Amcu members have downed tools since January 23, she said in an email.

A strike called by the National Union of Mineworkers at Northam Platinum lasted 11 weeks before the union signed a two-year deal on January 21 for pay increases of as much as 9.5%.

"Getting a decision may take a week or two" for Amcu leadership after many workers returned to their homes far from Rustenburg for the Easter holiday, JPMorgan analysts including Steve Shepherd and Allan Cooke wrote in a note on Tuesday. "Then, after more than three months of standing, a safe startup of stope faces would take weeks, not days."

May election
The strike may last until after the May 7 presidential election, Hanre Rossouw, commodities chief for frontier and emerging markets at Investec Asset Management, said on Monday. "For Amcu, if there's any political platform that they want to use, it would be senseless to give it up before elections," he said. The union says it isn't affiliated with political parties.

Amcu leader Mathunjwa "needs a face saver" if the R12 500 basic wage demand isn't met, said Levy. That could take the form of a one-time payment for miners to return to work. He also said it would be wise for the union to negotiate a clause that would limit or delay companies cutting jobs.

The union is seeking a venue for a meeting of its members at the three companies, Siphamandla Makhanya, an Amcu shop steward, said. "We are prepping for a mass meeting but the date is not yet set," Makhanya said. – Bloomberg