/ 4 February 2014

Platinum pay strike costs South Africa R400-million a day

Lost revenue at Anglo American Platinum
Lost revenue at Anglo American Platinum

South African platinum strikes are costing the nation about $36-million a day, the mining chamber estimated, as the world's three largest producers of the metal and the union leading the walkout resume negotiations.

While lost revenue at Anglo American Platinum, Impala Platinum and Lonmin is about R200-million, the total cost to the country is double that amount, Roger Baxter, chief operations officer of the Chamber of Mines, said in Cape Town on Tuesday.

About 40% of South Africa's platinum industry is marginal or loss-making at current prices, he said. "The wage increases that are demanded by Amcu [the Association of Mineworkers and Construction Union], specifically the R12 500, are unaffordable for the industry and will push more of the industry into loss-making territory, which clearly is not in the interests of anyone," Baxter said at the Investing in African Mining Indaba conference. "We need to focus on getting this industry stabilised."

Amcu, representing more than 70 000 members as the majority labour group in the platinum belt, is due to meet with the companies on Tuesday in Pretoria.

The union, which has been on strike since January 23, is demanding that basic wages be more than doubled to R12 500 a month. "The key is partnership," Baxter said."Partnership between ourselves and government, partnership between ourselves and the unions. Collective problem-solving is more effective than sitting in a corner and throwing stones at each other."

Strike spreads
The Commission for Conciliation, Mediation and Arbitration (CCMA), a consultant to the talks, put forward a proposal for the companies and unions to consider, it said in a February 1 statement. The mediated proposal could form the basis of a final settlement, the CCMA said. 

"I think it will allow the parties to engage more in an attempt to solve the strike," Amcu president Joseph Mathunjwa said by phone, referring to the talks. "We will be hearing from the company to see if they agree to the CCMA proposals."

The National Union of Metalworkers of South Africa (Numsa), the largest labour group at Anglo American Platinum's refineries and smelters, joined the strike on Monday, Steve Nhlapo, an organiser for the union, said in a phone interview.

Numsa is demanding pay increases of as much as 10% for higher-skilled employees and a raise of at least R2 500 rand monthly for the lowest paid employees. "We're not part of the Pretoria talks, they will have to set up a meeting," Nhlapo said, referring to the Anglo American unit. – Bloomberg