With most sectors underperforming at best, it would be easy to see platinum group metals (PGMs) — which are up by as much 33.21% in the past year — as one to which unions would be looking for generous, across-the-board wage increases.
But despite the state of play in the sector, the annual wage negotiations are a mixed bag. Some deals have already been struck at as low as a 5.5% increase and some employers are offering as little as a 3.3% increment, while the more aggressive union demands are for as much as a 47% wage hike.
The country’s largest union in the platinum sector, the Association of Mineworkers and Construction Union (Amcu), kicked off the negotiations with its R17 000 basic wage demand, despite coming out of a bruising five-month-long strike in the gold sector.
The gold sector strike is the longest strike since the Amcu-led strike at Lonmin’s Marikana platinum mine in 2012, which lasted six months.
René Hochreiter, a mining analyst at Noah Capital Markets, has described Amcu’s wage demand as “pie in the sky”. He said: “I think this time Amcu is a lot weaker because there are [leadership] problems with [Joseph] Mathunjwa, the president. And the strike at the beginning of the year weakened them a lot.”
Amcu is now asking for far more than its signature R12 500 wage demand at Marikana, and has tabled an annual increase of R1 500 a month for its workers for the next three years. The union argues that its expectations can be justified by the appreciation of the PGM basket price in the first quarter of this year from $1 073 an ounce to $1 221 an ounce. The union said that the rand PGM basket price for platinum, palladium, rhodium and gold increased from R12 839 an ounce to R17 104 an ounce in the first quarter of 2019.
Amcu’s rival union, the National Union of Mineworkers (NUM), has tabled wage demands of between 6% and 12.5% at various mines. In a document seen by the Mail & Guardian, NUM says that its low membership across various platinum mines may contribute to its members accepting lower-than-demanded salary increases in wage negotiations.
Historically, NUM was the dominant union in the platinum sector, but now plays second fiddle to Amcu. Its power has been further weakened by job losses in the sector. Of the 167 000 workforce in the country’s platinum belt, NUM counts 30% — about 50 100 — as members.
Unlike in the gold sector, platinum wage negotiations are conducted on a company-by-company basis, meaning demands by unions and offers by employers may differ depending on the operation.
NUM says it “negotiates under tremendous pressure from Amcu”, which has a 60 000-strong membership in the platinum sector. The union plans a rigorous recruitment drive “to change the status quo” in the sector.
NUM’s lower membership numbers of 1 590 compared Amcu’s 2 955 at Siyanda Bakgatla Platinum Mine in the North West affected its ability to negotiate higher salaries for its members. NUM rejected the company’s offer of 5% increase for year one and two and 5.5% for year three. The union demanded 6% across the board for its members.
In June, Amcu accepted the company’s offer and signed the three-year deal with Siyanda. It secured a basic wage of R14 309 a month for its members in the third year of the deal. NUM, however, says that it plans to recruit more members to challenge the agreement. If the union is successful in recruiting more miners by the July 2020 implementation date, it plans to renegotiate the deal.
Talks in the platinum sector between unions and larger mining companies kicked off in July following the conclusion of the deal between Siyanda and the union.
At Anglo American Platinum, (Amplats) where NUM has about 5 800 members, it has demanded annual increases of 12.5% or R1 500 a month for the next three years. The company has offered R1 000 or 5.5%, whichever is greater, for year one and R800 for years two and three. The company has offered Amcu, which has 9 511 members, a similar deal. Last week, Mathunjwa said that although the offer is not what the union has demanded “there is light at the end of the tunnel”.
At the release of its financial results last month, Amplats chief executive, Chris Griffiths warned Amcu that its wage demand is unaffordable, in spite of the mining house’s profits after tax skyrocketing from R2.3-billion in the previous financial year to R7.36-billion this year.
For category A and B workers, Impala Platinum (Implats) has offered Amcu members annual increases of R800 a month for the next three years. The company has also placed a 5% increase for category C workers on the table. NUM, which has 1 213 members at Implats, did not participate in wage negotiations at the mine.
Amcu has singled out Sibanye-Stillwater’s platinum operation in Marikana for what it called an “insult” and a “slap in the face” wage offer. For category A and B workers, the company has offered a R300 a month basic salary increase for year one, R350 for year two and R400 for year three. Category C and D workers have been offered a 3.3% increase.
Sibanye spokesperson James Wellstead has said that the union’s demands are unaffordable and may affect the sustainability of its Marikana operations. Sibanye recently acquired Lonmin’s operations in the North West for about R5.2-billion. The deal, opposed by Amcu, made Sibanye the world’s largest platinum producer.
“We don’t think that Sibanye has intentions to negotiate in good faith and also to keep the mine in operation. Their intention is to provoke the workers and close down the mine,” Amcu treasurer general and chief negotiator, Jimmy Gama, told the M&G.
The company has denied Amcu’s allegations that it plans to close its Marikana mine. “We would like to reach sustainable and fair agreements with Amcu and its comments regarding the mine’s operations are unfortunate,” said Wellstead.
“[Mining companies] are making a killing with these palladium, rhodium and platinum price increases. We’re going to push for more. We are not pleased with what they have put on the table,” Gama said.
Thando Maeko is an Adamela Trust Business reporter at the Mail & Guardian