Johannesburg - Government-led talks to end platinum strikes that have crippled output of the metal in South Africa resume as the rand trades close to its weakest level in more than five years.
Workers at the world’s three largest producers of the metal, Anglo American Platinum, Impala Platinum and Lonmin, are yet to reach an accord with employers on wage demands, which include calls by the Association of Mineworkers and Construction Union to more than double entry-level pay to 12,500 rand a month.
“The strike continues and we will meet for negotiations today,” Jeff Mphahlele, AMCU’s general secretary, said in a phone interview.
“It’s too early to tell” what the outcome will be.
South Africa, with the largest known reserves of platinum, relies on metal exports for more than half its foreign-exchange earnings, and disruption at the mines has led to a burgeoning current-account deficit.
The rand, the worst performer among 16 major currencies tracked by Bloomberg, slumped to its weakest level against the dollar since October 2008 on January 24.
“The mining sector is crucial to the South African economy,” Finance Minister Pravin Gordhan said January 24 at the World Economic Forum in Davos, Switzerland.
“Government is working very hard at mediating some of the differences between employers and labour unions” to end the strikes, he said.
President Jacob Zuma has dispatched Labour Minister Mildred Oliphant to facilitate talks between the companies and the Association of Mineworkers and Construction Union.
Anglo American Platinum, Impala and Lonmin are losing an estimated 9,900 ounces of platinum a day.
The AMCU has unseated the National Union of Mineworkers as the biggest labor organisation at the platinum mines.
It has gained in membership and influence since the killing of at least 44 people at Lonmin’s Marikana operations in August 2012.
Mine stoppages inflated the deficit on the current account, the broadest measure in the trade of goods and services, to 6.8 percent of gross domestic product in the three months through September, according to Statistics SA.
Africa’s largest economy relies on foreigners buying stocks and bonds to fund the gap.
The rand weakened 0.5 percent to 11.1486 per dollar by 8:50 a.m. in Johannesburg.
Platinum for immediate delivery rose 0.5 percent to 1,435.44 an ounce.
The nation’s economy will expand 2.8 percent this year, according to the median estimate of 24 economists surveyed by Bloomberg from January 17 to January 22. - Bloomberg News