File photo: Reuters

Johannesburg - Anglo American Platinum (Amplats) is considering starting section 189 talks with unions, signalling retrenchments might be on the cards as the the Association of Mineworkers and Construction Union (Amcu)-led strike that has crippled the platinum belt enters its tenth week.

The announcement marks an escalation in a tit-for-tat wage dispute that has laid bare the inability by the government and the industry to resolve the impasse speedily.

Chris Griffith, the chief executive of Amplats, on Friday vowed that the big three platinum producers would not budge on the wage hike demanded by Amcu.

Amplats had lost a third of production at its Rustenburg operations this year and they were not expected to makeprofit for the year, he told the media at the company’s head office in Johannesburg on Friday.

“As we stand, Rustenburg cannot make profits this year. We are saying at what point are we going to shut Rustenburg; the same goes for Union.”

The strike had necessitated the conversion of labour-intensive mines to mechanised operations that would improve costs and eventually result in the reduction of the workforce.

Impala Platinum would have to abandon the R11 billion Leeuwkop mine, where construction had started, unless it could be redesigned into a mechanised mine, Business Day reported on Friday.

Leeuwkop would have employed 10 000 people as a labour-intensive mine, but would employ between 2 000 and 3 000 as a mechanised mine, the newspaper said.

About 25 500 Amplats employees were expected to receive no pay at the end of the month while 2 000 others would receive less than R1 000 after working a week, he said.

Griffith broke down the impact of the strike, saying it had cost Amplats 173 000 ounces in production, and revenue of R4.6bn, at a time when its debt was R13bn. The platinum majors have previously put their combined losses at R10bn.

“We have a responsibility of ensuring the profitability of our mines. This means we have to start a conversation with labour on how to do so as we have no choice but to look at other options,” Griffith said.

Amcu is demanding a R12 500 a month minimum wage, which Amplats, Lonmin and Impala Platinum have said was unaffordable.

Assenting to the demand would mean that Amplats would require an additional R9bn to service wages, Griffith said.

He said the message was for employees to return to work.

Talks at the Commission for Conciliation, Mediation and Arbitration between mediators and employers are expected to continue today.

Amcu’s bid to embark on a mass protest in support of its demand with solidarity strikes by its members in the coal and gold sectors in terms of section 77 of the Labour Relations Act was rejected at the Nedlac negotiating forum on Friday.