The operations suspended as a result of two murders and subsequent violent clashes between rival unions at Northam Platinum’s Zondereinde mine this week were not enough to turn investors off.
The share price, at R44 a unit on Thursday, was 65% higher in the year to date and 5% stronger than it was a week earlier.
René Hochreiter, a mining analyst at NOAH Capital Markets, said such labour issues were temporary and did not affect the company in the long term. “The plant is still running and, with their stockpiles, they can probably survive a week or two,” he said.
Northam Platinum has done “fantastically” compared with other platinum mines, Hochreiter said.
Generally, platinum mines have had a tough few months with the metal price hitting $830 an ounce in January. But it has recovered and is now about $1 000 an ounce.
The deepest part of Northam’s mining operations, where Zondereinde is, has the highest grade of platinum ore in the Bushveld complex but it is the most expensive to mine, Hochreiter said. At the other end of its mining operations, the grade is low but so is the cost, and the company is shifting its focus to this side of the operation.
Northam is the fourth-largest platinum miner in the country, producing 200 000 ounces a year.
Operations at the mine were interrupted this week after the fatal shooting of an employee, reportedly a member of the National Union of Mineworkers (NUM), on Sunday in Northam town. On Monday, another man, reportedly a member of the Association of Mineworkers and Construction Union (Amcu), was killed near the mine. He was stabbed to death with an assegai.
Members of the two unions clashed on the R510 between Northam and Thabazimbi that morning and many vehicles were set alight.
“The management of Northam Platinum advises that talks continue with all parties to resolve the situation at the Zondereinde mine and return employees to work. A mass meeting to be attended by the NUM, management and the SAPS [South African Police Service] has been scheduled to be held on the mine this morning,” the mine said in a statement on Wednesday. On Thursday, miners refused to return to the mine.
Like the platinum strikes in 2012, notorious for clashes between protestors and police at Marikana that resulted in the death of 34 miners, the mine is accused of excluding Amcu from talks. Amcu said
Northam mine management, the NUM and the police had held an “isolated” meeting without them on Tuesday. “What is the agenda of such hidden meetings?” the union tweeted.
Other reports claim Amcu snubbed the meeting.
Both unions are worried about the safety of their members. The NUM has said six of its members have been murdered in Northam over the past year and Amcu said it feared for the safety of its members should they return to work.
“The safety of our #Amcu members is being disregarded by #Northammine management! This is reminiscent of #Marikana again! This isn’t right!” the union tweeted.
This week, Mineral Resources Minister Mosebenzi Zwane appealed to all stakeholders not to do anything that undermines the Framework Agreement for a Sustainable Mining Industry and the rule of law‚ peace and stability.
Amcu has taken issue with some aspects of the agreement and has not signed it.
Zondereinde is the only platinum mine where the NUM still represents the majority of unionised employees. It lost its majority to Amcu at several mines, including those of Lonmin and Anglo American Platinum, following the 2012 strikes.