Johannesburg - The three biggest platinum producers and the main union at their South African operations will consider proposals by the mines minister to end a more than 18-week strike that’s crippled output and shrunk the economy.
Mineral Resources Minister Ngoako Ramatlhodi last week brokered talks between Anglo American Platinum, Impala Platinum, Lonmin and the Association of Mineworkers and Construction Union to try end a strike over pay by more than 70,000 employees that started on January 23.
“The parties generally have taken those recommendations to their constituencies” and are expected to return “within a reasonable period,” Mahlodi Muofhe, a spokesman for the mineral resources department, said by phone today.
The stoppage by workers in the country with the biggest reserves of the metal has cost the producers 20.6 billion rand in revenue in the industry’s longest and costliest strike.
It has cut mining’s contribution to the economy by the most in 47 years in the first quarter, resulting in the first contraction in gross domestic product since a 2009 recession, Statistics South Africa said last week.
The AMCU wants basic monthly pay excluding benefits for entry-level underground employees to be more than doubled to 12,500 rand by 2017, while employers are including cash benefits in this figure.
They’re offering raises of as much as 10 percent annually.
South African inflation was 6.1 percent in April.
“The potential for the country to go into recession is a possibility,” said Mark Rosenberg, Africa director at Eurasia Group in New York, said in a May 30 phone interview.
“The fact that the GDP number came out is probably the most important driver” in the government’s involvement, he said.
Ramatlhodi was sworn in last week after the nation’s May 7 general election, which was won by the African National Congress party.
He put together a team with representatives from the National Treasury and the Labour Ministry to resolve the standoff over wages.
“I think it’s great to see this process,” Hanre Rossouw, commodities chief for frontier and emerging markets at Investec Asset Management, said May 30.
The government’s preoccupation with the elections limited earlier intervention, he said.
The situation may not be any different for the minister than it was for his predecessor, Susan Shabangu, according to Peter Attard Montalto, an emerging-markets strategist at Nomura International in London.
“I don’t see Ramatlhodi being able to do anything different to Susan if he sticks with the standard tool kit; all he is doing is classic ANC engagement,” he said.
The union asked the nation’s labour court to prevent Anglo American Platinum and Impala from communicating details of the wage offer directly to workers through text message.
The matter was struck off the court role today as the union was unable to prove that the matter was urgent, Amcu lawyer Jayson Kent told reporters in Johannesburg.
The “harm” caused by direct communication “is ongoing,” resulting in union divisions, he said. - Bloomberg News