Bloomberg News

Platinum Strikers Won’t Back Down on Pay Demand ‘Made in Blood’

March 06, 2014

AMCU Members

Members of the Association of Mineworkers and Construction Union (AMCU) march to the Union Buildings in Pretoria on March 6, 2014. Photographer: Mujahid Safodien/AFP/Getty Images

The union leading a strike at the world’s largest platinum mines said it won’t back down on demands over pay after talks to end the dispute collapsed.

The Association of Mineworkers and Construction Union, which has been on strike for six weeks, marched on South African government offices in Pretoria yesterday in support of its call for basic monthly wages to be more than doubled.

“Our demands were submitted with blood on the mountain in Marikana,” AMCU President Joseph Mathunjwa told protesters at the Union Buildings. He was referring to a strike at the mines of Lonmin Plc (LMI) during which at least 44 people died in 2012. “There is no way we are turning back on it.”

The gap in negotiations between the union and Anglo American Platinum Ltd., Impala Platinum (IMP) Holdings Ltd. and Lonmin, which together account for more than two-thirds of all the platinum mined globally, remains wide, the state mediator said March 5. The AMCU wants pay for entry-level miners to rise to 12,500 rand ($1,174) from about 5,000 rand.

More than 70,000 members of the union have been on strike since Jan 23. Producers say they have lost a combined $660 million in revenue and that employees have forfeited $290 million since the walkout started.

The AMCU handed a memorandum to an official in the office of President Jacob Zuma at the Union Buildings yesterday. The labor group called in the document for the resignation of Mines Minister Susan Shabangu, who it accused of “incompetence,” and said employers should change their position on pay.

Invitation Declined

The platinum producers said they declined an invitation from the AMCU to send representatives to the march.

“The companies have been engaging with AMCU in various forums for several months,” Anglo Platinum (AMS), Impala and Lonmin said in a joint e-mailed statement.

Lonmin, the third-largest producer, won’t meet its full-year sales target of at least 750,000 ounces of the precious metal because of the strike, it said this week. The company said it can’t estimate the increase in costs caused by the walkout.

The price of platinum, used for jewelry and car catalytic converters to reduce emissions, has climbed 8.5 percent this year. Platinum for immediate delivery gained 0.6 percent to $1,487 an ounce by 6:41 p.m. in Johannesburg yesterday.

The mediator, the Commission for Conciliation, Mediation and Arbitration, said March 5 it “has decided to adjourn the process to give all parties an opportunity to reflect on their respective positions.”

‘Discouraging Events’

The companies have offered to raise entry-level wages, which range from 5,000 rand to 5,700 rand a month, to as much as 7,200 rand by 2015. On March 4, the AMCU said it would give the companies three years to meet its minimum target after first demanding immediate increases to that level. The producers said the demand remains unaffordable.

Amplats, as the biggest producer is known, is “discouraged by the turn of events,” Chief Executive Officer Chris Griffith said March 5. “We are hopeful though that AMCU will come to recognize and appreciate the realities of the company’s position and will work toward a solution that will benefit its members.”

The companies gained in Johannesburg trading yesterday. Amplats and Impala were 1.9 percent higher and Lonmin advanced 3.7 percent by the 5 p.m. close.

A Johannesburg court is due to rule by the end of the week on whether the AMCU and its leaders are in contempt for allegedly ignoring an order handed down in January that the union prevent violence during a strike.

Amplats brought the application after an AMCU official was killed in clashes with police and two others were arrested for the attempted murder of a company employee last month.

The National Union of Mineworkers, which is not on strike, said another one of its members was attacked early yesterday on his way to Amplats’ Union mine.

The worker “suffered serious broken ribs, a broken hand and another hand with a very big open cut wound,” the NUM said in an e-mailed statement.

To contact the reporters on this story: Tshepiso Mokhema in Johannesburg at tmokhema1@bloomberg.net; 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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