London - Anglo American’s four-month battle with labour union Amcu at its local platinum mines was inevitable because the requests by workers are unsustainable, chief executive Mark Cutifani said.
“It’s the fight we had to have,” Cutifani said yesterday in a speech in London.
“What’s being asked, for us is unsustainable. And at the same time, the productivity in the platinum sector is one tenth the productivity in the Australian mining sector and we are paying one fifth of the wages.”
Anglo controls the world’s largest platinum producer, which has been disrupted by a strike in South Africa since January.
The Association of Mineworkers and Construction Union (Amcu) has called more than 70,000 miners out, including employees at Anglo American Platinum.
Union members are on strike over a demand for basic monthly pay excluding benefits for entry-level underground employees to be more than doubled to 12,500 rand by 2017.
The producers have said increases of that order would cost too much.
Minister of Mineral Resources Ngoako Ramatlhodi is coordinating talks between the union and Anglo American Platinum, Lonmin and Impala Platinum, which continue in Pretoria, for a third day today.
“This is one of those challenges we have to take on as an industry, as a company and as a country,” Cutifani said at an event organised by the Melbourne Mining Club.
“I’m comfortable we’ll get there, but it does need us to stand our ground and be constructive and find a solution to work in the long term.”
The Amcu sought changes earlier this week to a government-brokered proposal on wages, two people familiar with the negotiations said yesterday.
“I really hope to get a call from the minister” after Ramatlhodi’s meeting with the producers, Mathunjwa said today by phone.
The union has made “no concession” on its demands, Mathunjwa told reporters in Johannesburg yesterday.
Cutifani, who started a review of assets a year ago after joining London-based Anglo, has set a goal of increasing the company’s return on capital to at least 15 percent by 2016 from about 8 percent in June, 2013.
He’ll consider disposing of any asset that weighs on the overall performance of the world’s fifth-largest mining company, which operates in iron ore, platinum, diamond, copper, nickel and coal.
Before Cutifani joined Anglo, the company had lost its market credibility, missed operating targets and lost shareholders because it couldn’t deliver on time and on budget, he said in a May 16 interview.
The 56-year-old Australian replaced Cynthia Carroll after she quit amid cost overruns and delays at the Minas-Rio iron ore and Barro Alto nickel projects in Brazil. - Bloomberg News