Platinum Union Says Breakthrough in Strike Talks, Plans Meeting

Jun 20, 2014 6:00 pm ET

June 21 (Bloomberg) -- A “breakthrough” has been made in talks to end a strike that has kept most mines shut at the world’s three biggest platinum producers since Jan. 23 and a meeting with workers will be held to announce it, a labor union official said.

More details will be given by leaders of the Association of Mineworkers and Construction Union, which represents the more than 70,000 miners on strike, at a stadium near Rustenburg on June 23, Jimmy Gama, the union’s treasurer, said by text message yesterday. Anglo American Platinum Ltd., the world’s largest platinum producer, is “hopeful” of an end to South Africa’s longest and costliest mining strike, spokeswoman Mpumi Sithole said in an interview.

“A breakthrough has been made,” Gama said. “Come to Royal Bafokeng stadium on Monday for more details.”

The AMCU has led a strike by workers at Anglo American Platinum, Impala Platinum Holdings Ltd. and Lonmin Plc in support of a demand that basic pay be doubled to a minimum of 12,500 rand ($1,173) a month. Producers say they’ve lost 23.4 billion rand in sales from the strike and workers missed out on 10.4 billion rand in wages. South Africa’s economy contracted in the first quarter as a result of the strike with mining output falling the most since 1967.

The producers last week agreed in principle to monthly pay increases of as much as 1,000 rand on current basic wages of about 5,000 rand to 6,000 rand.

The union met with each of the employers this week to discuss conditions raised by the union over pay proposals presented to workers last week. Talks with Impala were “positive,” Gama said earlier.

Constructive Meeting

“Our meeting with AMCU has been constructive and we’re hopeful about a positive outcome in the very near future,” Sithole of Anglo American Platinum said.

Impala spokesman Johan Theron said his company’s meeting with the union was still in progress “but by all accounts we’re making progress.” Mineral Resources Minister Ngoako Ramatlhodi said he expects a deal to be concluded this weekend, according to Johannesburg Eyewitness News website. Lonmin spokeswoman Sue Vey didn’t immediately respond to calls seeking comment.

While workers accepted the pay proposal at mass meetings, they had conditions to their assent relating to issues including back pay, the length of the agreement, reinstatement of some workers who had been fired and accommodation allowances, AMCU President Joseph Mathunjwa said on June 12. The union was to call another mass meeting after the conditions were discussed with companies, Mathunjwa said.

The AMCU became the biggest union on South African platinum mines, which account for about three quarters of world output, after a strike at Lonmin Plc’s Marikana mine in 2012. During that strike police shot dead 34 protesting mine workers and another 10 miners, security guards and policemen died.

Platinum for immediate delivery fell 1.1 percent to $1,455.94 an ounce by 9:02 p.m. in London. Anglo American Platinum fell 0.4 percent to 490 rand by the close of trade in Johannesburg while Impala declined 0.6 percent to 113 rand. Lonmin gained 0.4 percent to 248.4 pence in London.

--With assistance from Paul Burkhardt in Johannesburg.