Bloomberg News

Biggest S. Africa Platinum Union Refuses to Sign Mines Pact (1)

July 03, 2013

AMCU President Joseph Mathunjwa

Association of Mineworkers and Construction Union President Joseph Mathunjwa addresses striking workers on May 15, 2013, in Marikana, South Africa. Source: AFP via Getty Images

The biggest union at the world’s three largest platinum mines refused to sign an agreement that seeks to bring stability to the mining industry in South Africa, which has been plagued by strikes and violence.

The Association of Mineworkers and Construction Union’s leaders left the meeting about the accord in Pretoria, the capital, without signing. Other labor organizations, mining companies, and government departments signed the pact.

“They do need a bit of space, and I think they also will have to consult,” Mineral Resources Minister Susan Shabangu said in an interview in Pretoria. “The tone, the language today, and their commitment to the actual document shows they will be coming back to sign.”

Labor rivalry spurred President Jacob Zuma to appoint Deputy President Kgalema Motlanthe to broker a solution by hosting the talks between the unions and companies. The competition has led to three worker deaths since May and has cut 0.3 percentage point off growth this year. This followed the killings of at least 44 people, including 34 killed by police in one day, near the South African operations of Lonmin Plc (LMI), the third-largest platinum producer, last year.

“We’re leaving,” AMCU President Joseph Mathunjwa said when asked whether the union will sign the accord.

AMCU Objections

The union raised objections over the dismissal of about 1,000 of its members at Glencore Xstrata Plc (GLEN)’s South African chrome mines and the loss of jobs at the Vaal River operations of AngloGold Ashanti Ltd. (ANG) last year, Lesiba Seshoka, spokesman for the rival National Union of Mineworkers, said in Pretoria. The AMCU also spoke out against the NUM’s Labour Court application on the validity of membership forms at Lonmin, and asked to consult with members on today’s pact, he said.

“They’ve got other issues but they’re raising them at the wrong platform,” Seshoka said.

A previous attempt to restore peace in mines in the nation, which has the world’s biggest known reserves of platinum, failed even as all unions, including the AMCU, and the biggest mine operators agreed to the pact, which Shabangu brokered in February and March.

No Option

“Failure is not an option as this will accelerate the creeping destruction of one of South Africa’s most important industries and inhibit the investment support that the country so urgently needs,” Bheki Sibiya, chief executive officer of the Chamber of Mines, which represents companies in the industry, wrote in the Johannesburg-based Business Day newspaper yesterday.

Falling precious-metal prices and higher costs have squeezed South Africa’s gold and platinum producers, who are facing demands from labor unions to as much as double wages for entry-level workers. More than half of South Africa’s gold and platinum operations are in loss-making positions, Sibiya said.

Today’s pact sets out processes that will see that all parties working together to ensure stability in mines, according to a statement handed to reporters in Pretoria today.

The “government will act decisively to enforce the rule of law, maintain peace during strikes and other protests relating to labor disputes, ensure protection of life, property and the advancement of the rights of all,” it said.

AngloGold Falls

The rand depreciated 0.9 percent 10.0852 per dollar at 5:17 p.m. in Johannesburg, extending its drop this year to 16 percent, the most among 16 major currencies tracked by Bloomberg.

“They came with new preconditions that were not raised at the meetings last week,” Gideon du Plessis, the general secretary of the Solidarity union, said of the AMCU. “They come with bread-and-butter issues but they have entirely unrealistic expectations.”

AngloGold, the world’s third-biggest and South Africa’s largest producer of the metal, extended declines, losing 4.9 percent, the most in a week, to 139 rand by the close in Johannesburg.

“They have nothing against the framework,” Motlanthe told reporters, referring to the AMCU. “It is theirs as much as it is ours. They had no preconditions. Investors are not interested in this document, they’re interested in a stable mining industry.”

The AMCU’s leadership asked to be given the chance to consult with its members, Motlanthe said.

To contact the reporter on this story: Andre Janse van Vuuren in Johannesburg at ajansevanvuu@bloomberg.net

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


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