Mineworkers gather at Wonderkop stadium outside the Lonmin mine in Rustenburg, northwest of Johannesburg in this file picture. The figure on the arm represents the minimum entry-level pay of 12,500 rand a month which the AMCU is demanding from the three platinum producers.

Johannesburg - Talks between the Association of Mineworkers and Construction Union (Amcu) and platinum producers collapsed on Thursday, after the union demanded an extra R1 050 a month, Thembinkosi Mkalipi, the Department of Labour’s acting deputy director-general for labour policy and industrial relations, said.

The three-day talks were an attempt to end the three month strike that has cost the platinum industry R14.5 billion in revenue.

About 70 000 Amcu members have been on strike since January 23 at Anglo American Platinum (Amplats), Lonmin and Impala Platinum.

Speaking to Business Report on Friday, Mkalipi said he could not blame anyone for the collapse of the talks, as employees wanted a higher increase and employers said they could not afford to do so.

A R1 050 increase would amount to a R70 million monthly rise in the wage bill for the platinum producers.

“If people say we were babysitting one party, this is wrong. We were babysitting both parties in order to resolve the strike because it takes two to tango,” Mkalipi said.

The three month strike comes after the wildcat strike in mid-August 2012, in which 44 people were killed in clashes between police and protesters at Lonmin’s Marikana mine.

Mkalipi disputed reports that Amcu had walked out of talks on Thursday, and explained that union president Joseph Mathunjwa and two Amcu leaders left early to catch a flight.

Amcu held mass meetings on Friday at Impala and Lonmin, union treasurer Jimmy Gama said in a text message.

A rally is planned for today in the platinum mining town of Rustenburg, SABC radio news reported. The union plans solidarity actions and efforts with its “brothers and sisters all over the world” where the platinum producers exist.

“If employees begin to accept the direct deal, they will start returning back shaft by shaft and then the trickle will become a flood,” Andrew Levy, who heads his own labour research company in Johannesburg, said.

“As soon as people start coming back to work then the strikers try to stop them. The risk of violence is increased quite significantly”, Bloomberg reported.

It is speculated that the union will approach National Economic and Labour Council (Nedlac) to revive its application for a sympathy strike in the gold sector to support the wage demand. Nedlac rejected the union’s application to march in terms of Section 77 of the Labour Relations Act last month. A Nedlac spokesperson said on Friday that no new application had been received.

Amcu said in a statement on Thursday that it made several proposals to increase basic pay to the lowest paid workers. It said Anglo American Platinum exaggerated its calculation of the cost of the different proposals by between R300 million and R500m.

“Their affordability argument collapsed when they were forced to acknowledge their false claim. Even the government officials observing the negotiations were left bewildered by their methods.”

However, Mkalipi said he was not bewildered at the calculations. “These are common issues in negotiations. We do not make a judgment in such issues,” he said.

Platinum producers are planning to send text messages and communication circulars, and start radio campaigns in an effort to convince employees to return to work.

“It is up to the employees to take the deal and go back to work. If employees do not want the deal, we will talk. We cannot close the door to negotiations,” Mkalipi added.

Impala sent text messages to cellphone numbers on its database on Friday. “All employees must now seriously consider this offer. We have to work together to find solutions that are affordable and possible to resolve this wage deadlock,” read one message.

Charmane Russell, the spokesperson for the platinum mines, said this was the message the producers would be taking directly to employees.

“In an industry where almost half of operations were not making a profit before the strike began, and where employee costs comprise 50 to 55 percent of operating costs, an increase of between 7 and 10 percent for employees is at the upper limit of what is affordable,” Russell said.

“And every day that there is a delay in accepting the offer, threatens the sustainability the industry – and jobs,” she added.

Gama did not answer his phone when contacted for comment on the decision by the companies or on reports that Amcu was considering going to Nedlac to revive its Section 77 application.

In its latest revised offer, employers have proposed a cash remuneration that will increase salaries of entry-level employees to R12 500 and R11 500 for entry-level surface employees by July 2017.

To achieve this, the cash remuneration for these employees would rise by between 7.5 percent and 10 percent across various bands.

The cash remuneration comprises basic wages, holiday allowances, living out allowances and other allowances.

By implementing these increases over the period, the cost to the company for the lowest paid underground employees would be in excess of R17 500 a month or R210 000 a year by July 2017.