Johannesburg - Platinum stockpiles built to weather a strike at the three largest producers of the metal may run out if a new round of talks to end a nearly six-week pay strike ends in deadlock.
Anglo American Platinum (Amplats), Impala Platinum (Implats) and Lonmin met the Association of Mineworkers and Construction Union (Amcu) yesterday after first-round talks had failed to end a strike.
More than 70 000 workers have been on strike over pay since January 23.
Producers had lost more than R6.6 billion in revenue while wages forfeited exceeded R2.9bn, a joint website of the companies showed yesterday.
“The strikes are going on longer than planned,” Stephen Meintjes, the head of research at Imara SP Reid, said. “People might have underestimated the mineworkers’ resolve.”
Amcu members want entry-level wages to more than double to R12 500 a month and have rejected a mediated increased offer of 9 percent.
Implats could only guarantee deliveries to offshore customers until the end of this month, marketing executive Derek Engelbrecht told reporters on Thursday.
This round of talks would be “critical” in resolving the impasse, Implats spokesman Johan Theron said yesterday.
“The losses could be so big for both parties that you could easily see a hardening of positions if you miss one another again,” Theron said.
Top producer Amplats was able to fulfil customers’ orders for six to eight weeks, it said in January. Lonmin had stockpiled 42 000 ounces of unrefined metal in the year through to September and had 13 000 ounces of unsold refined platinum, it said last November.
Lonmin declined to comment on guarantees for platinum deliveries. Amplats was not immediately available.
“We’re not that far away”, from producers reaching the end of their stockpiles, Justin Froneman, an equity analyst at SBG Securities, said. “That’s when you’re going to see a real reaction from the market.”
Amplats lost 2.07 percent to close at R450 yesterday, paring the gain since the strike started to 4.2 percent.
Implats was little changed at R114.57 at yesterday’s close, having lost 9.4 percent since January 23, while Lonmin dropped 0.61 percent to R53.77, taking the drop since the start of the walkout to 9 percent.
Investors had not yet priced in the effect of the strike on companies’ earnings, Froneman said.
“There is more positive sentiment around the companies doing what is right and sticking together,” he said, referring to the producers’ agreement to negotiate as a unit.
“If someone does break rank, I think you’re going to find the dynamic changing very quickly.”
Amcu had not moved during talks “as per the spirit of negotiations”, Mineral Resources Minister Susan Shabangu said at a conference in Toronto at the weekend. “That union is not moving an inch, it’s stuck in one position.
“My understanding is that if that happens, within the labour relations law that’s an unfair labour practice,” she said.
Amplats and the union are due to meet in a Johannesburg court tomorrow after the company asked that Amcu leaders be held in contempt of an order obliging them to prevent violence during the strike.
All three affected producers earlier obtained court permits compelling the union to keep to picketing rules.
An Amcu official was killed in clashes with police and two others were arrested for the attempted murder of an Amplats worker last month.
A winch operator on his way to the company’s Union mine was attacked yesterday, according to a statement by the National Union of Mineworkers.
While dissent within Amcu has emerged, the size of factions has not yet been established.
Gaddafi Mdoda, a former Amcu member, and now a member of The Workers Committee, an unstructured group claiming members at Implats and Amplats, said on Friday that labour was not unified enough for a strike.