Union Joins Minister in Upbeat Tone on Platinum-Strike Talks

Jun 04, 2014 2:57 am ET

(Updates with union leader’s comment in third paragraph.)

June 4 (Bloomberg) -- South Africa’s mines ministry and the dominant union at the world’s largest platinum producers said they were upbeat about progress made during talks to end a four- month strike that has paralyzed operations.

The Association of Mineworkers and Construction Union met yesterday with Minister of Mineral Resources Ngoako Ramatlhodi after responding to wage proposals made by a task-team convened by the ministry late last week, Mahlodi Muofhe, a spokesman for Ramatlhodi, said by phone. Anglo American Platinum Ltd., Impala Platinum Holdings Ltd. and Lonmin Plc will restart discussions with the government today, Charmane Russell, a spokeswoman for the producers, said in a text message.

“We believe at the end of the day there will be some breakthrough,” AMCU President Joseph Mathunjwa said today by phone. Ramatlhodi “is taking the matters on the table very seriously,” Mathunjwa said.

More than 70,000 AMCU members have been on strike since Jan. 23 over pay demands. South Africa’s economy contracted in the first quarter for the first time since a 2009 recession as the walkout caused mining production to plunge by the most in 47 years.

“I am encouraged by the progress on this matter, and the cooperation of all parties involved,” Ramatlhodi said in an e- mailed statement following talks with the AMCU yesterday.

A wage deal discussed in the negotiations last week would benefit lowest-paid workers the most, according to two people familiar with the talks. Those with the lowest salaries would receive an increase of 800 rand ($74) a month every year for five years, according to the people, who asked not to be identified because the information isn’t public.

Studying Plan

The producers are assessing the plan put forward by Ramatlhodi’s team, which believes it to be “a fair and reasonable compromise considering the companies’ financial circumstances and AMCU demands,” Russell said.

“The companies are reviewing the recommendations and undertaking the necessary financial analyses,” she said.

The AMCU would be available for further talks today if these are requested by the state’s task-team, Mathunjwa said.

The union wants basic monthly pay excluding benefits for entry-level underground employees to be more than doubled to 12,500 rand by 2017. South African inflation was 6.1 percent in April. The last offer made public by producers amounted to increases of as much as 10 percent a year.