Picture: Boxer Ngwenya.

Johannesburg - As gold and platinum prices gained traction last week, a looming industry-wide labour action orchestrated by the Association of Mineworkers and Construction Union (Amcu) threatens to eclipse any shine in the mining sector this year.

The prices of gold and platinum, which fell dramatically last year, strengthened late last week, helping to pull the rand back from a five-year low against the dollar.

But the unprecedented consolidation of disputes into one major action could once again shake investor confidence, and threaten the operation of mines and stability in the sector.

“The move is important because Amcu has been collecting a series of legal authorisations to strike across companies but not using them, instead choosing to undertake one large action that could drive the wider industry to a halt in the region,” Peter Attard Montalto, an analyst at UK-based Nomura, said in a note last week.

Gold rose $23.50 to fix at $1 225 an ounce in London on Thursday afternoon and added another $9.50 to $1 234.50 at Friday’s second fix. Platinum fixed at $1 388 (up $30) and at $1 404 (up $16) on Thursday and Friday afternoon, respectively.

Amcu, the biggest union in the platinum sector, has hoarded certificates of non-resolution from disputes with Anglo American Platinum (Amplats), Impala Platinum and Lonmin, the three biggest producers of platinum.

Amcu treasurer Jimmy Gama confirmed the cache on Friday but said the union was awaiting a mandate from its members on whether or not to go on strike.

“Only members from Impala voted to go on a strike last year. We are planning to establish a mandate among our members at Amplats and Lonmin,” he said.

Amcu received the strike certificates after it rejected the wage offers in last year’s negotiations, which resulted in strikes by other unions in the platinum and gold sectors.

According to Attard Montalto, Lonmin had a tough 2013 as it tried to align its operations with social responsibilities, including restructuring worker relations and investing more in housing and the provision of community health and food.

“Which probably means it needs no further job losses in 2014, though we believe it may well have to undertake further restructuring from 2015 onwards,” he said.

Attard Montalto believes that these factors reduce some of the underlying tensions in mining communities.

The strike would send a negative message for the investment community, said Michael Bagraim, a law expert based in Cape Town.

“A strike sends a horrible message to investors. It says ‘we still cannot get it right’.

“It is a devastating thing,” Bagraim said.

Asked whether he could give an assurance that there would be no major outbreaks of violence, Gama said the union’s plans were part of deliberations by its national executive committee at a strategic session held at the weekend.

“Let’s hope that this will be a peaceful year in terms of labour relations. It cannot only be Amcu that is responsible for peace. Employers and the government have a part to play,” Gama said.

Previous attempts to calm the labour unrest include the peace accord led by Minister of Mineral Resources Susan Shabangu and signed by the labour unions and the Chamber of Mines last February.

Deputy President Kgalema Motlanthe also led the establishment of a peace agreement to restore investor confidence in the mining sector last year.

This agreement was not acknowledged by Amcu, which said it could commit only after consulting its membership. But it never reported back.

Meanwhile, progress could not be ascertained in the matter of three people arrested in December in connection with murders at mines in Marikana, two of whom are linked to the murder of Nobongile Nora Madolo, a National Union of Mineworkers shop steward who was killed outside her home.

One of the men was apparently wearing an Amcu T-shirt at the scene of a tavern shooting in Wonderkop.

Gama has distanced Amcu from any involvement in the murders, saying the union could confirm the involvement of members only after examining its registry.