Platinum sector ‘walking a tightrope’

Reuters

Industrial unrest at South Africa’s platinum mines, resulting in the death of workers at Impala Platinum (Implats) and rival Lonmin, was increasing the risks facing the sector as it grappled with low prices and rising costs, a senior executive said last week.

Terence Goodlace, the chief executive at Implats, said: “We are walking a tightrope.”

“These developments pose a significant risk to the industry. At this point we believe we have a measure of stability, but it is unreasonable to say nothing will happen to us,” he said at a presentation on the company’s results, which showed a 38 percent drop in headline earnings to R6.85 a share.

The platinum industry has been hit by a wave of labour unrest, first at Implats’ Rustenburg operations at the start of this year and more recently at Lonmin, which led to police killing 34 striking miners in a hail of bullets two weeks ago.

The violent strike at Rustenburg sliced 21 percent off the firm’s production for the full year. A turf war between the National Union of Mineworkers (NUM) and the Association of Mineworkers and Construction Union (Amcu) has threatened to spread across the country’s platinum belt.

Seeking a way through the labour disruptions and bloodshed, Goodlace said the world’s largest platinum producers were discussing a move to collective bargaining.

The platinum sector currently negotiates with unions on a company-by-company basis, leaving firms open to labour discontent as rival organisations promise workers they can cut better deals.

This situation has also fuelled resentment and created wage disparities between platinum companies that do not exist in the gold and coal sectors, which bargain collectively.

Implats human resources executive Johan Theron warned that collective bargaining was not a magic solution, but said it was a way to get industry players to a table.

Implats is awaiting the outcome of a union-approved independent audit on trade union membership at its Rustenburg operations, which may show that Amcu, regarded as more militant than the NUM, is the new top union there.