By late yesterday it was not clear whether the Association of Mineworkers and Construction Union (Amcu) will sign the final settlement offer of the employers and bring an end to the five-month strike that has brought the economy to its knees.
Employers have met with union leadership this week, but were tight-lipped about the content of the meetings last night.
Amcu agreed in principle to sign the offer after an overwhelming mandate from their members during mass meetings last week in Rustenburg.
The meetings with the employers were necessitated by Amcu’s formal response to the final settlement offer by the employers early this week which included new terms that risk derailing the end of the strike.
Amcu’s response, however, included new terms that have the potential to prolong the strike. The terms are expected to add R1 billion to the platinum producers wage bill, they said in a joint statement.
This includes back pay of R1 000 for the duration of the strike, living-out allowances to rise in line with consumer price index and that the companies pay a R3 000 back-to-work bonus for each of the 70 000 striking employees.
Back-to-work bonuses are not new in the mining industry.
Since the labour unrest in which 34 people were killed in Marikana in August 2012, striking mineworkers have received back-to-work bonuses as part of a negotiated settlement to end strikes.
The strike has created a humanitarian crisis, and this is why the back-to-work bonuses will help to ensure that the employees are nourished before they can return underground.
Today, Impala Platinum will meet with Amcu leadership to understand their response to the offer.
Both Anglo American Platinum and Lonmin held separate meetings with the Amcu leadership yesterday.
Food, clothing and footwear retailers will be able to weather the storm as consumers further tighten their belts. Meanwhile furniture, homeware, appliances and building material retailers are in for harder times.
Economists felt that yesterday’s retail sales growth at 1.8 percent continued to point towards a subdued trend in consumer spending. The weakening economy and rising inflation has put the Reserve Bank in a difficult place.
Nedbank’s economic unit said household financial conditions and consumer confidence was weak and this would contain spending growth in months ahead.
It said the Reserve Bank faced the dilemma of striking a balance between the weak economy and rising inflation . However, governor Gill Marcus has made it clear that the rate-hiking cycle has begun, but the extent and speed of tightening will be dependent on data.
Economists also believe that, should further interest rate hikes be introduced, it would negatively impact the number of impairments, bankruptcies and unemployment levels, and a lower home ownership via defaults.
Consumers are already facing electricity and water rates increases next month and would have to juggle this with debt repayments, school fees, transports costs and other expenses.
With all these in mind, consumers do not have disposable income to spend on non-essential items such as electrical appliances and furniture.
A retail analyst had previously said a consumer would rather fix a broken kettle or washing machine than buy a new one. Besides the effects of the strike in the platinum belt, furniture retailers have indicated that sales have dropped elsewhere in the country.
Meanwhile, clothing and food retailers reported impressive results.
Chief economist at Investec Annabel Bishop believes that the strike action in the platinum sector would have negatively affected expenditure on non-durable goods but there will be also a significant impact from slowing demand on a wider basis in the country.
Bishop further states that expectation that the next move in interest rates was up was suppressing both business and consumer confidence.
Edited by Peter DeIonno. With contributions from Dineo Faku and Nompumelelo Magwaza.