Amplats set to sue Amcu for damages

Published Feb 17, 2014

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Johannesburg - Court action by Anglo American Platinum (Amplats) to recover nearly R600 million in compensation from the Association of Mineworkers and Construction Union (Amcu) has opened another front in the battle between the union and leading platinum producers.

More than 70 000 Amcu members have been on strike since January 23 at Amplats, Impala Platinum (Implats) and Lonmin. They are demanding that monthly wages for the lowest-paid underground workers be more than doubled to R12 500.

Amplats was suing Amcu for R591m, spokeswoman Mpumi Sithole said. The company was claiming for damage to property, increased security costs, and production losses caused by non-striking employees being prevented from going to work, Sithole said.

Combined lost revenue at the three companies had reached about $315m (R3.4 billion), with strikers giving up $140m in pay, a spokesman for the producers said.

South Africa accounts for about 70 percent of global production of the metal, which is used in jewellery and catalytic converters for vehicles.

Amplats was producing 5 000 ounces a day and had lost more than 60 000 ounces valued at R1bn, chief executive Chris Griffith said at a presentation during parent Anglo American’s results in London on Friday. “We sold just over 200 000 ounces in January so we continue our sales because of the stock we built up.”

Industry observers have expressed support for the court action, but it is thought that it could also be withdrawn as part of horsetrading over a settlement in the dispute that so far has proved intractable.

Mining firms should have sued unions for damage to property as far back as the strikes by the National Union of Mineworkers (NUM) in the 1980s as it was within their legal right to do so, Peter Major, a mining specialist at Cadiz Corporate Solutions, noted on Friday.

“Part of the problem is that they have let it go on for so long,” Major said, and called on the government to intervene.

“Although they will never get R500m, the government has a right to deregister Amcu. If they cannot control the crowd, they are unable to call a strike.”

A continued hard line against the strike was spelled out last week by Mark Cutifani, Anglo American’s chief executive. He said the strike at the group’s ailing platinum business would not hinder restructuring plans.

Speaking at a results presentation for the financial year to December, Cutifani said Amplats was on a hard road. The group would “stand its ground” and forge ahead with the restructuring. “The labour issue will not delay restructuring; in fact it speeds up the work on the reconfiguration.”

Griffith said Amplats was losing 4 000 ounces of production a day as a result of the strike. But it had inventories to mitigate the effects, and the group had sold 200 000 ounces of platinum last month.

He predicted that strike fatigue would end the work stoppage. It was pay day next week, the second time in a row that employees would not be paid.

“The provisional quantum of the damages claim is about R591m, although as Amcu’s wrongful conduct is continuing, the damages will continue to accrue,” Sithole said.

Implats said it was preparing for the strike to last until May as talks to resolve the deadlock made little progress, Bloomberg reported.

NUM president Senzeni Zokwana said: “When you get stuck in saying just (R)12 500, nothing less, nothing more, I don’t regard that as negotiations or as the way to find a settlement.”

Amcu is the dominant union in the platinum belt and has majority representation among unionised workers at the three major producers.

Cutifani said Amcu’s recruitment in the sector was flattening. Its plan to strike in some gold companies was shelved after a temporary interdict by the Labour Court last month.

“The key message is that we will not move,” Cutifani said.

Attempts to contact Amcu for comment this weekend were unsuccessful.

Additional reporting by Bloomberg

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