(Updates with comment from AMCU leader in second paragraph.)
June 12 (Bloomberg) -- The union whose strike has paralyzed production at the world’s three largest platinum companies has agreed to the employers’ plan that may end a more than four- month pay strike.
“In principle they agree,” Association of Mineworkers and Construction Union President Joseph Mathunjwa said today at an Impala Platinum Holdings Ltd. meeting with miners. While workers’ acceptance of the proposal is “a breakthrough,” they have conditions to their assent relating to issues including back pay, the length of the agreement, reinstatement of jobs and living-out allowances, he said. The leader also met with employees at Anglo American Platinum Ltd. and Lonmin Plc.
Undertakings have been reached “in principle” with the union’s leaders covering wages and conditions of employment, the producers said in a joint statement. Platinum and palladium prices dropped on the news.
More than 70,000 members of the union have been on a strike over pay since Jan. 23 in the country that accounts for about 70 percent of global mined platinum production. The companies say workers have missed out on 9.9 billion rand ($926 million) in wages and that they have lost 22.2 billion rand in revenue.
Mineral Resources Minister Ngoako Ramatlhodi said June 9 he was withdrawing from efforts to resolve the walkout.
“It was getting to the point where there was very limited visibility after the minister left the process so this is coming as a surprise,” Tyler Broda, a London-based mining analyst at Nomura International Plc, said by phone. “That’s what the equities and the metal prices are showing at the moment.”
Impala proposed to improve the basic monthly wage of its lowest-paid miners by 1,000 rand ($94) in the first and second years, AMCU Treasurer Jimmy Gama told workers as he read from a letter by the company dated yesterday. That compares with a previous plan of 580 rand in year one and 680 rand in year two.
It also proposed an increase of 950 rand a month in years three to five of the proposal, compared with 750 rand in year three, 840 rand in year four, and 900 rand in year five, he said.
Living-out allowances will remain at constant 2013 levels, Impala said in a statement.
“The process is a very sensitive one and we will ensure that we act in good faith,” Charmane Russell, a spokeswoman for the three producers at Russell and Associates, said in an e- mail.
Impala shares were little changed at 113 rand by the close in Johannesburg. Anglo American Platinum declined 1.7 percent to 470.26 rand, while Lonmin surged 8.9 percent, the most since Jan. 31, 2013, to 257.7 pence in London.
Platinum for immediate delivery fell 3 percent to $1,437.35 an ounce at 5:43 p.m. in London and palladium sank 4.7 percent to $820.50 an ounce.
“The only agreement we have is that the union will go back to members and refresh its mandate,” Impala spokesman Johan Theron said by phone. The companies and the AMCU will hold further talks should union members respond positively, Theron said.
The AMCU will hold another meeting with members once it’s met with the producers, Mathunjwa said.
--With assistance from Tshepiso Mokhema and Kevin Crowley in Johannesburg.