Platinum strike losses reach R12bn

Time of article published Mar 12, 2014

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Johannesburg - Production losses at the world’s largest platinum companies caused by a seven-week strike today eclipsed those from stoppages in 2012 as talks over pay with the South African union leading the walkout remain deadlocked.

Anglo American Platinum, Impala Platinum and Lonmin have lost about 499,000 ounces, calculations using figures from the producers show.

A spate of strikes in 2012 that erupted into violence leaving at least 44 people dead, cost 496,359 ounces of output, excluding production lost as mines gradually resumed full operations.

The state mediator suspended talks on March 5 because the producers and the Association of Mineworkers and Construction Union remained far apart.

“We’re still in a deadlock,” Johan Theron, a spokesman for Johannesburg-based Impala, said today by phone.

“Nobody has made any movement.”

Workers downed tools in 2012 for higher wages as they defected from the National Union of Mineworkers to eventually join the rival Amcu.

The current walkout was called by the Amcu on January 23 to support its demand for monthly entry-level pay of underground miners to be more than doubled to 12,500 rand.

The three employers, who are negotiating as a unit, have offered to increase current basic pay of 5,000 rand by as much as 9 percent.

The price of platinum for immediate delivery has been little changed since the strike started, even as Impala said it couldn’t guarantee deliveries to customers, starting April.

The precious metal, used for jewellry and autocatalysts that help reduce harmful emissions from vehicles, was unchanged at $1,464.63 an ounce by 10:22 a.m. in Johannesburg.


Lost Wages


The companies have lost more than 8 billion rand in earnings, a website run by the three producers showed today.

Striking workers have foregone 3.6 billion rand in wages, it said.

It’s unlikely that the strike will be settled before it enters its eighth week, Mark Rosenberg, an Africa analyst at New York-based Eurasia Group, said in an e-mailed note March 10.

“Amcu will struggle to sell any deal that doesn’t include an end-goal of 12,500 rand, which even if phased over a number of years is starkly unaffordable for producers,” Rosenberg said.

The labor group said March 5 it will accept an offer that sees the wage level it seeks reached within three years.

“As the strike moves into its eighth week, we expect negotiations will pick up,” Rosenberg said.

The union may extend its time horizon for getting to its demand “to something like five years,” he said. - Bloomberg News

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