Bloomberg News

Anglo Platinum Says Workers Return After Strike

January 17, 2013

South Africa should nationalize mines that Anglo American Platinum Ltd. (AMS) will idle in plans by the biggest producer of the metal to return to profitability, a union claiming the majority of workers at the company said.

The Association of Mineworkers and Construction Union wants Mines Minister Susan Shabangu to “reissue” mining permits that aren’t being used by companies such as Anglo American Platinum, known as Amplats, AMCU President Joseph Mathunjwa told reporters today in Johannesburg.

The ruling African National Congress in December rejected proposals to nationalize mines in favor of higher taxes in the world’s largest producer of platinum, ending uncertainty for companies including London-based Anglo American Plc (AAL), which owns 79.8 percent of Amplats. The platinum unit has proposed to reduce output by 19 percent and may cut as many as 14,000 jobs to stem losses spurred by a two-month strike last year.

“As long as this country is run by the foreigners, we are far from any solution,” and the government should take definitive action on resource ownership, Mathunjwa said. “Let’s see how this works on a small scale,” he said, referring to nationalizing the idled Amplats shafts.

Amplats shares declined for a fifth day, losing 2.4 percent to 447 rand by the close in Johannesburg.

Employee Return

Mining companies in South Africa are struggling to cope with higher production costs as a spate of strikes led to above- inflation wage gains. Producers in the continent’s largest economy shut nine platinum mine shafts and dismissed 3,332 workers in the second half of last year, according to the Department of Mineral Resources.

The AMCU represents 26,000 workers at Amplats’ operations, Mathunjwa said. The company had 51,200 employees in 2011, according to the most recent annual report on its website.

Mining companies said union rivalry played a role in disruptions that halted gold, chrome, platinum and iron-ore mines in South Africa last year, with the AMCU recruiting members at the expense of the National Union of Mineworkers, or NUM, which has historically dominated the industry.

Harmony Gold Mining Co. (HAR), Africa’s third-biggest producer of the metal, is considering closing its biggest mine after strikes and violence led to the suspension of operations at Kusasalethu, it said Jan. 7.

AMCU Majority

The AMCU represents the majority of workers at Kusasalethu, where 6,000 employees could lose their jobs should the mine be closed. Illegal meetings and marches by the AMCU, whose representatives have been reluctant to negotiate with the company, contributed to the unrest, Harmony Chief Executive Officer Graham Briggs said.

The AMCU represents 62 percent of employees at the mine, while the NUM stands for 28 percent, he said, citing unverified figures.

The situation at Kusasalethu had become uncontrollable, with NUM shop stewards bringing guns into the mine, and management denying mass meetings by workers who were locked out in January, Mathunjwa said. Harmony and the union are holding talks over possible job losses today, he said.

At Lonmin Plc (LMI), where police killed 34 people on Aug. 16 amid labor walkouts, AMCU represents 54 percent of workers, Jimmy Gama, the union’s treasurer, said today. The union also claims the majority of employees at Impala Platinum Holdings Ltd. (IMP) operations, which is disputed by the NUM.

Increased Representation

“Last year AMCU was 40,000 members and they wanted to ramp up to 100,000,” Justin Froneman, an analyst at SBG Securities Ltd., said by phone from Johannesburg, citing discussions he’d had with the union. “Their ambition was to really get this thing going on and I think you’ve seen that play itself out.”

Employees returned to work today at Amplats operations in Rustenburg and north of Pilanesberg in South Africa after a strike over the restructuring plan.

There are “no walkouts” and everything is “normal” for the morning shift, Mpumi Sithole, a spokeswoman for Johannesburg-based Amplats, said in an e-mail.

Workers at the Khomanani, Thembelani and Tumela mines refused to go underground on Jan. 16 in protest over the company’s proposals.

Anglo American risks losing some mining rights because of the plan, Shabangu said Jan. 15.

The Commission for Conciliation, Mediation and Arbitration, an independent statutory dispute-resolution body, said today Amplats asked it to facilitate discussions with the respective labor unions about possible retrenchments.

NUM spokesman Lesiba Seshoka said nationalization of the Amplats mines wouldn’t work.

“Where is the money to run these operations,” Seshoka said. “The income is too little.”

To contact the reporter on this story: Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net


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