Platinum Talks Resume Today in Effort to End 18-Week Wage Strike

May 23, 2014 6:00 pm ET

May 24 (Bloomberg) -- Representatives from the world’s three biggest platinum producers and the main union at their South African mines will continue pay talks today in a bid to end a strike that’s crippled output for 18 weeks.

Anglo American Platinum Ltd., Impala Platinum Holdings Ltd. and Lonmin Plc have been locked in mediation with the Association of Mineworkers and Construction Union for three days, with Labour Court Judge Hilary Rabkin-Naicker presiding over the talks.

“We are still in discussions and we are continuing over the weekend,” Association of Mineworkers and Construction Union President Joseph Mathunjwa told reporters at the Labour Court in Johannesburg yesterday. He declined to say whether the parties were closer to an agreement.

The producers want to end a strike over pay that more than 70,000 miners started on Jan. 23, costing the companies 19.2 billion rand ($1.9 billion) in revenue and the workers 8.6 billion rand in wages. Five people, including four miners, have been murdered this month, while thousands of starving families around the miners, located around Rustenburg in the North West province, rely on food aid.

The AMCU wants basic monthly pay, without benefits, to reach 12,500 rand by 2017 for entry-level underground employees. The demands would equate to a 30 percent increase in the first year of the agreement, which the companies say is unaffordable. They’re offering raises of as much as 10 percent annually. South African inflation was 6.1 percent in April.

Report Incorrect

“Mediation is ongoing,” said Abey Kgotle, Lonmin’s head of human resources. The third-biggest platinum producer said in a statement yesterday that “the parties have fully embraced this process.”

State-owned SABC News television reported yesterday that the parties had reached an agreement, citing AMCU lawyer Larry Dave. Mathunjwa said this was false. The report is incorrect, Dave said by phone.

Impala has declined 8.3 percent since Jan. 23 in Johannesburg trading, while Amplats has risen 10 percent and Lonmin is down 19 percent. The metal, which decreased as much as 1.8 percent and was down 1.1 percent to $1,474.99 an ounce by 6:54 p.m. in London yesterday, is up 1.2 percent in the period.