Bloomberg News

Platinum Talks Today Will Seek End to Pay Strike at Mines

January 24, 2014

Striking Miners March in Marikana

Striking miners chant slogans as they march to Wonderkop Stadium near Lonmin's platinum mine in Marikana. Photographer: Alexander Joe/AFP via Getty Images

South Africa’s government will today mediate talks between union officials and the world’s three biggest platinum producers as a strike that’s crippling mines enters a second day.

Labor Minister Mildred Oliphant will lead talks between Anglo American Platinum Ltd. (AMS), Impala Platinum Holdings Ltd. (IMP) and Lonmin Plc (LMI) and the Association of Mineworkers and Construction Union, said Musa Zondi, her spokesman. The discussions are due to begin at 9 a.m. in Johannesburg. The companies should expect “marathon negotiations,” AMCU President Joseph Mathunjwa said.

“There are pressures from all sides” to reach an agreement, AMCU Treasurer Jimmy Gama said today by phone. “When you have these pressures, all the parties need to apply their minds constructively to deal with the issue.”

At least 70,000 employees downed tools at platinum mines yesterday in South Africa, home to 70 percent of the world’s production of the metal, causing about $13.1 million of lost revenue on the first day. The police force stepped up safety measures as it sought to avoid a repeat of labor unrest that claimed the lives of at least 44 workers near platinum mines in August 2012.

Platinum's Deep Divide

The AMCU, the biggest representative of workers at the mines, has said it will continue the walkout until pay demands are met. The union wants wages for the lowest-paid entry-level miners to be more than doubled to 12,500 rand ($1,134) a month. South Africa’s inflation rate was 5.4 percent in December.

Rand Decline

The rand declined 0.2 percent to 11.0176 per dollar by 7:54 a.m. in Johannesburg today. The platinum producers incur most of their costs in the South African currency, which has depreciated 23 percent since the start of last year against the dollar, in which platinum is priced.

Hundreds of striking employees wielding fighting sticks and machetes and singing protest songs marched at Impala’s Rustenburg mines yesterday. Members of the National Union of Mineworkers, which has been displaced by the AMCU as the biggest labor representative at platinum mines, flocked to the NUM’s offices for safety after being prevented from reporting for duty.

“We again saw large-scale blockading of entrances” at the start of the strike’s second day, Johan Theron, a spokesman for Johannesburg-based Impala, said today by phone. The company canceled its night shift for the duration of the strike to avoid non-striking employees from commuting in darkness.

Lost Production

About 10 percent of employees reported for duty at the company yesterday, which will lose about 2,800 ounces a day through the stoppage, Theron said.

Platinum is used in jewelry and catalytic converters that reduce harmful emissions from vehicles.

Some members of the UASA union were intimidated at Impala and Amplats, Franz Stehring, the organization’s head of mining, said by phone.

“We won’t hesitate to withdraw our members from duty if the mines can’t guarantee their safety,” he said. UASA mainly represents higher-skilled workers at the operations.

No incidents have been reported around Lonmin mines today, spokeswoman Sue Vey said. The company will lose about 3,100 ounces of platinum a day because of the strike. Anglo American Platinum, which hasn’t provided a figure, lost about 3,100 ounces daily during a similar walkout in October. The 9,000 ounces of lost platinum between the three companies equates to about $13.1 million of revenue based on yesterday’s spot price.

Platinum for immediate delivery rose 0.2 percent to $1,459.81 an ounce by 8:05 in Johannesburg. Amplats yesterday gained 2.3 percent to close at 442.01 rand. Impala climbed 1.4 percent to 127.55 rand. Lonmin was little changed at 320.9 pence in London.

To contact the reporters on this story: Andre Janse van Vuuren in Johannesburg at ajansevanvuu@bloomberg.net; Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net; Kevin Crowley in Johannesburg at kcrowley1@bloomberg.net

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


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