No end in sight for costly platinum strikeComment on this story
Johannesburg - Although analysts say strike-fatigued employees in the platinum belt are close to breaking point after four weeks on a wage strike that is taking its toll on an industry with revenue losses of R4.4 billion, there is no end in sight.
This means that tensions will intensify, resulting in more violence as protesters begin to feel the pinch, and mine jobs are likely to be lost as marginal shafts are closed, according to Michael Kavanagh, an analyst at Noah Capital Markets.
“Mines can go on for some time; they have scope in their balance sheet and if the strike continues will have support from the equity market,” Kavanagh said yesterday.
Labour and employers are worlds apart and the indications are that the strike will be protracted as the Association of Mineworkers and Construction Union (Amcu) dug in its heels yesterday.
The union would continue its fight for salary adjustments, Joseph Mathunjwa, Amcu’s president, said during a press conference yesterday, a day after platinum chief executives gave an ultimatum for the employees to either take or leave their latest pay offer.
In the coming weeks, Amcu members will march to mining houses and to government offices where they will deliver their petitions and demands.
“We will co-ordinate campaigns locally and to the international community, where we will unravel the extent of exploitation in South Africa at the hands of multinational companies,” Mathunjwa said.
He called on the chief executives of Anglo American Platinum (Amplats), Impala Platinum (Implats) and Lonmin to get involved in the government-mediated wage talks to resolve the strike, instead of sending representatives.
Mathunjwa launched an attack on the industry for allegedly colluding with the minister of mineral resources to have the union ousted, a reference to Amplats’s decision to sue it for R591 million for damages during the strike.
“We are a joint venture; if they fail to pay workers R12 500, where do they think Amcu will get R591m?”
The sector is in trouble as half of the shafts are loss-making because of high costs and soft commodity prices.
The industry said the strike, which threatens foreign exchange earnings, was exacerbating these challenges.
Platinum chief executives drew a line in the sand on Wednesday, saying the R12 500 minimum pay demand was unaffordable. They also said the strike was undermining confidence in local mining and each painted a bleak future for their operations if production did not resume soon.
“Some Amplats mines will not make a profit this year; this [strike] cannot continue any longer. At some point in time there is very big damage, for example the debt levels will increase,” Amplats chief executive Chris Griffith said.
Terrance Goodlace, the chief executive at Implats, said 10 percent of underground workings at its mines were irreversibly damaged and would require a huge amount of rehabilitation to get the operations up and running. “You just have to speak to Northam Platinum on what has happened to their ground positions. We will be operating for two to three months at unprofitable levels.”
Members of the National Union of Mineworkers went on an 11-week strike for higher pay hike at Northam’s Zondereinde mine over year-end.
About 70 000 Amcu members are on strike.
In a bid to curb violence, Implats has put non-striking employees on leave, while Lonmin has closed operations. - Business Report