Johannesburg - The 16-week platinum belt strike pushed mining production into decline for a second consecutive month in March, with output volumes falling 4.7 percent year on year after contracting 4.5 percent in February, Statistics SA reported yesterday.
The Stats SA data show that production of platinum group metals has come to a standstill, with volumes falling by 44.3 percent year on year in March after a 35.10 percent contraction in February. The sector contributed minus 10.1 percentage points to the industry’s 4.7 percent shrinkage.
“April will be worse, there might have been residual production in pipeline. In April the production pipeline will be depleted,” Michael Kavanagh, a metals and mining analyst at Noah Capital, said yesterday.
Lonmin delivered an interim loss due to the ongoing strike.
The company said on Monday that it had lost 155 720 platinum ounces of output during the six months to March due to the 16-week wage strike. The company also posted a loss of 35.5c a share compared with a profit of 13.3c a year earlier.
Some of the bright sparks were the diamond mining volumes which grew 14.2 percent year on year in March after declining 9.6 percent in February, while coal output grew 6.8 percent compared with a 3.9 percent fall in February.
Gold production volumes declined 2.9 percent in March after a 3.7 percent drop in February, while growth in manganese ore output slowed to 24.6 percent in March from 39.6 percent in February.
Nedbank’s economic unit said the performance of the mining sector was likely to be volatile in the months ahead, pressured by labour unrest, infrastructure constraints, a challenging policy environment and slower growth in China.
“Mining figures are volatile and have little influence on policy decisions in the short term, but the persistent weakness will have a negative impact on gross domestic product growth,” it said. “Given the need to balance growth prospects with higher inflation we anticipate that rates will rise by 25 basis points at two of the next four meetings.”
This comes as Lonmin prepares for cash-strapped employees to return to work today as part of its attempt to break the protracted labour dispute that has cost the industry more than R17 billion in revenue.
The Association of Mineworkers and Construction Union (Amcu) is expected to hold a mass meeting at Wonderkop Stadium in Rustenburg today where it is expected to hear if the mandate from its employees has changed.
“It is not the company that called on members to go on a strike. Maybe people without a union will return to work.
“Tomorrow they will be disappointed. They cannot tell our members what to do,” Evans Ramokga, an Amcu shop steward, said yesterday.
Johan Theron, the spokesman at Impala Platinum (Implats), said the escalating tensions were likely to be resolved with a simple message to Amcu and other influential leaders to acknowledge the constitutional right of employees to return to work.
Implats is trying to gauge employee appetite to return to work. Once overwhelming numbers of staff agree to return to work, and safety measure have been put in place, miners can return to work.
“It can be tomorrow or several months into the future.
“The biggest impediment to this is still that they are scared to do so and are awaiting Amcu to moderate their demands to secure a return to work mandate and for the government to intervene and provide sufficient protection in the residential areas to enable them to safely return to work,” Theron said.
Lonmin and other platinum producers have offered minimum cash remuneration for entry-level underground employees rising to R12 561 by July 2017, from R8 359. Including other benefits the lowest paid underground employee’s pay at Lonmin will rise to R14 653 a month by July 2017.