June 9, 2014 7:14 pm

South Africa mining strike talks end

Government brokered talks to end the five-month platinum strike that is battering South Africa’s economy collapsed on Monday with the parties deadlocked.

Anglo American Platinum, Impala and Lonmin – the world’s top three producers of the precious metal – said in a joint statement that they would “now review further options” as the longest and costliest industrial action in the mining sector’s history shows no sign of ending.

Johan Theron, a spokesman for Impala, said companies could consider cost-cutting measures such as putting shafts on long-term care and maintenance, look at legal options or consider taking their offer direct to workers instead of going through the union.

“There’s just no compromise from their [union] side and they just don’t accept the financial realities of what we can and can’t do right now,” Mr Theron told the Financial Times.

However, Joseph Mathunjwa, president of the Association of Mineworkers and Construction Union, said it had “made many concessions”.

“We actually moved twice to make employers move closer to us,” he said, adding that the union was sticking to its R12,500 a month pay demand.

South Africa is the world’s biggest producer of platinum, but mining and quarrying output shrank nearly 25 per cent on an annualised basis in the first quarter of this year – the biggest fall in nearly 50 years.

The companies say the strike has cost them R21.7bn ($2bn) in lost revenue, while striking employees have lost R9.6bn in wages.

The latest round of talks began two weeks ago and were led with by Ngoako Ramathlodi, who was appointed mining minister last month after the ruling African National Congress won May 7 elections.

Mr Ramathlodi had been upbeat as he predicted that a resolution to the wage dispute was close. But he warned on Saturday that he would end his mediation if no agreement was reached by the end of Monday.

The wage dispute stretches back a year when the producers began wage talks – which are held every two years – with Amcu.

Amcu is an upstart union that is engaging in formal negotiations for the first time after it grew rapidly on the back of a wave of violent wildcat strikes in 2012, during which police shot and killed 34 striking Lonmin miners.

It has demanded that the minimum basic entry level wage for underground miners be more than doubled over four years to R12,500 month – the rallying cry during the 2012 unrest. But the companies insist the demand is unrealistic and unviable as they struggle with rising costs and a subdued platinum price.

The producers, which had been offering salary increases of up to 10 per cent, had pledged to guarantee that they would increase lower paid workers’ salaries by no less than R800 a month. The basic minimum monthly salary is between R5,000 and R6,000, which increases with bonuses and benefits.

About 70,000 workers at Amplats, Impala and Lonmin have been on strike since January 23.

Amcu argues that traditional percentage increases are insufficient to elevate salaries to a “living wage” after workers were exploited by decades of colonialism and apartheid.

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