Amplats can afford substantial hike

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br anglo Independent Newspapers Striking platinum workers chant struggle songs during a mass rally at Olympia Park Stadium in Rustenburg on May 1. Members of the Association of Mineworkers and Construction Union have been on a wage strike for more than three months. Photo: Itumeleng English

On April 24, a space for a resolution to the platinum strike suddenly opened up. Since then, the platinum cartel’s public relations staff has been busy hiding this space and trying to close it.

They are able to quickly filter their dishonest narrative of the strike into the media cycle. The first victim in war is truth, as the saying goes.

On Thursday, two negotiators from Anglo American Platinum (Amplats) used a printed PowerPoint presentation to argue that the range of explored alternatives for a deal were “unaffordable”, again promoting the employer’s (and Department of Labour’s) position of below 10 percent wage increases for all.

When an anomaly in the tables was pointed out, they admitted that their calculations of costs reflected the employment situation in July 2013.

At that time there were “47 502” Amplats employees in the lower pay categories A, B and C, organised by the Association of Mineworkers and Construction Union (Amcu).

By in December there were “42 024”. The number dropped by 5 500, was the reply. And from there the number has gone down further rather than increased, hasn’t it? The Amplats negotiators were unable to oppose the cost logic that follows from this.

In the following hours, the Department of Labour and the platinum cartel were confronted with the revelation and its consequence.

The former was upset at being misled. The latter did not respond, other than “We disagree”, and left the room to regroup. By 5pm they came back from their caucus and pretended nothing had happened.

Amcu issued a press statement pointing out that Amplats had exaggerated its potential cost increase for any alternative explored at the table by “between R300 million and R500m”.

The December employment numbers were distributed in January. Perhaps this had been forgotten by Amplats’s delegation. The numbers are, typically, not detailed.

But they are precise in dividing the total number in A, B and C categories, and the calculation “mistake”, together with an affordability benchmark delivered on April 22 by Amplats chief financial officer Bongani Nqwababa, should at least change the media’s narrative of the strike: “I can only agree to a R1 billion total cost increase for the A, B and C categories.” Hopefully, it will also change the setting at the table.

Why is R1bn an affordable increase? Will South African business journalism even care to ask? Remember: here “affordable” also means that it contains or lays the basis for what Amplats’s managers think meets the owner’s demand for a good return on capital – the profit.

At any rate, the presenting of a figure like R1bn, with correct and detailed employment and wage data, is a basis for a logical and holistic position in wage negotiations.

But with Amplats caught in a corner, this is what the cartel now wants to avoid. They don’t want to discuss total cost to company, as they said in Friday’s press statement, trying to hide that Amplats has been speaking about costs for at least a week.

Amcu’s revised bid – R12 500 in basic wage, over a period four years – means about R1 800 more a month over the first year to 35 000 Amplats employees in grades A and B (reaching R12 500 if repeated annually for another three years). A percentage increase well above inflation for the higher or much higher paid C category could be considered.

The data on wages and employees – collected from different Amplats sources – show, approximately, that this deal would increase Amplats’ total cost by about R1.3bn in the first year, assuming that 42 000 is now a good annual average number for the A, B, C workforce. The total labour cost increase for Amplats would be less than 18 percent (and falling for the following years).

The R1.3bn increase is higher than Nqwababa’s R1bn limit, but the difference is obviously negotiable. One only has to look at it. Not the least, because no motivation for the rounded number has been provided. It should be investigated by business journalists and it can be rethought again by Amplats’s chief financial officer and his staff, now or later, like June or July.

It can be noted that a R1 350 increase for the majority, calculated together with the December employment figures and what is known about Amplats wage data, increases costs for the first year by just about Nqwababa’s magic R1bn.

The first year’s increase in total cash remuneration for the vast majority of workers would be well above or around 15 percent in all of the companies.

Besides the low wage regime, one of the biggest problems in South African labour relations is the corporate principle of disclosing as little data as possible to worker representatives.

The unnamed “off the record” source in Business Day (April 29), who claimed that Lonmin and Impala Platinum had been more open about their costs, is wrong. What they have provided Amcu with in detail is the individual results of different wage increases for different pay grades.

They are still silent, after 14 weeks of strike, about total cost to company, and what they regard as “affordable”.

This principle of non-disclosure was broken by Amplats during the last two weeks of talks. Even if this was done in bad faith, it has opened up space for a deal. It should be a deal close to what the mineworkers are demanding.

* Brian Ashley is the director and Dick Forslund is the senior economist at the Alternative Information and Development Centre.


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