Impasse in platinum negotiations

Labour negotiations in the platinum sector have stalled. Producers had a stockpile of up to eight weeks ready in anticipation of strikes. (Reuters)

Labour negotiations in the platinum sector have stalled. Producers had a stockpile of up to eight weeks ready in anticipation of strikes. (Reuters)

The platinum companies claim the Association of Mineworkers and Construction Union (Amcu) has been unwilling to budge on a demand of a R12 500 minimum wage which is "simply not feasible", despite revised wage offers on the table.

The union however maintains its demand for a "living wage" and will now seek to intensify the industrial action.

Strike action on the platinum mines has moved into its second week and now, with negotiations which began on January 27 crumbling, there is no end in sight.

Producers had a stockpile of up to eight weeks ready in anticipation of labour strikes and in hopes of weathering the storm better this time than they did during the protracted labour strikes in 2012.

All the while strike action continues to intensify in the platinum belt where police are out in full force trying to quell the unrest.

In a statement issued on Wednesday on behalf of the chief executives of the three platinum companies – Chris Griffith of Anglo Platinum, Terence Goodlace of Impala and Ben Magara of Lonmin – they said both parties must actively engage with one another and seek to make compromises.

The chief executives said that prior to the strike 45% of platinum operations in South Africa failed to break even and prolonged labour action would result in more losses and further restructuring of the platinum sector.

"To date, our three companies have lost revenue of around R2-billion in the current strike, and employees have lost wages and benefits of around R900-million. It is estimated that the cost to the country has been around R4-billion … While an expeditious resolution would be in the best interests of all parties, it remains imperative that we continue to pursue a settlement that is affordable, achievable and sustainable."

The chief executives said Amcu's demands had not shifted since negotiations began. It "is simply not feasible, and would effectively mean a doubling of the industry's wage bill," they explained.
The revised offer made by the platinum producers on 29 January 2014, which remains on the table, is a three-year deal that includes increases of up to 9% in the first year, 8% in the second year and 7.5% in the third.

'Cooling off period'
Negotiations in the platinum industry have historically happened on single-employer basis and not on a central level as is done in gold and coal mining. Lonmin spokesperson Sue Vey said the talks had stalled and would resume after a "cooling off period".

Neither Amcu president Joseph Mathunjwa nor union treasurer and lead negotiator in the talks Jimmy Gamma were immediately available for comment but in a report by Business Day on Thursday, Gama was quoted as saying no progress was registered in talks "and the union would now be consulting its members and 'other interested groups' to seek ways to intensify its industrial action".

According to the publication, Gama said proposals to unions and affiliates would be extended through Amcu's labour federation, the National Council of Trade Unions and may precipitate some sort of co-operation between Amcu and the National Union of Metalworkers of South Africa (Numsa) whose 1 800 members at Anglo American Platinum's precious metals refinery downed tools on Monday.

Dispute resolution body the Commission for Conciliation, Mediation and Arbitration (CCMA), which had facilitated mediation between Amcu and Lonmin, Anglo American Platinum and Impala Platinum to resolve the strike in the platinum sector on Wednesday, said the process had been adjourned and would afford it "an opportunity to engage with the parties individually, in an effort to seek a resolution. The individual engagements with the parties will be taking place shortly."

In the statement CCMA director Nerine Kahn explained the mediation process is ongoing. "Allowing parties an opportunity to consider and consult whilst in their constituencies is a critical part of any facilitation process," she said.

Lisa Steyn

Lisa Steyn

Lisa Steyn is a business reporter at the Mail & Guardian. She holds a master's degree in journalism and media studies from Wits University. Her areas of interest range from energy and mining to financial services and telecommunication. When she is not poring over annual reports, Lisa can usually be found pottering about the kitchen. Read more from Lisa Steyn

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