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March 20, 2014 5:40 pm
Anglo American Platinum said it had reached a deal to end a more than six-week wage strike at its processing plants in South Africa.
The announcement by the world’s top platinum producer is the first hint of positive news for the country’s industry in three months. But a separate wage strike by tens of thousands of miners at Amplats, Impala Platinum, and Lonmin is entering its ninth week in what is rapidly turning into one of most concerted and costly strikes in South Africa’s history.
That strike was called by the Association of Mineworkers and Construction Union – an upstart organisation that has grown exponentially to become the dominant union in the world’s most important platinum producer. The strike has already cost the three companies a total of more than R9bn ($824m) in lost revenue, but negotiations were suspended this month because the gap between the parties was so wide.
The agreement Amplats announced on Thursday was with the National Union of Metalworkers, which represents about 10 per cent of the company’s 4,500 staff at its processing plants.
The parties agreed to a pay increase ranging from 7.5 per cent to 8.5 per cent in a two-year deal.
The figure is above inflation but far below what Amcu has been demanding as it pushes for a more than doubling of the basic monthly wage of an underground miner to R12,500.
The platinum companies have insisted that the demand is unviable and unrealistic, warning that accepting such a demand would lead to shaft closures and job losses.
Insisting that nearly half of platinum operations in South Africa fail to break even, the companies have offered up to 9 per cent increases. This has been rejected by Amcu, but the union did table a revised offer that the producers said would equate to a basic wage increase of between 25 per cent to 35 per cent year-on-year over a four-year period.
Amplats said that offer remained “unaffordable”.
“The increases on offer are already significantly above the current inflation rate and therefore the company encourages Amcu to also accept the current offer,” it said.
But there appears to be little sign of a resolution in sight as both parties play hardball with the industry in uncharted territory.
It is the first time Amcu, which came to prominence during the wave of wildcat strikes in 2012, has been involved in formal wage talks and it is the first time a strike has been called simultaneously at the three top producers.
South Africa is home to about 80 per cent of the world’s proven platinum reserves, but the industry has been struggling with rising costs, subdued prices and labour unrest.
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