South Africa's AMCU union to take revised platinum offer to members

Reuters News
Posted: Jan 29, 2014 11:00 AM

By Zandi Shabalala

PRETORIA (Reuters) - The world's top platinum producers have made a revised wage offer to South Africa's AMCU union but it falls short of its demand for a minimum "living wage" of 12,500 rand ($1,100) a month, the union's chief negotiator said on Wednesday.

Jimmy Gama told reporters the Association of Mineworkers and Construction Union (AMCU) would put the offer to its members on Thursday after the conclusion of government-brokered talks with strike-hit Anglo American Platinum, Impala Platinum and Lonmin.

Gama's tone suggested little hope for an imminent end to the stoppage, which started last Thursday and has hit over 40 percent of global production of the precious metal used to build emissions-capping catalytic converters in automobiles.

Tensions were also on the rise on the gritty platinum belt after police fired rubber bullets to disperse AMCU members who were blocking a road and preventing non-strikers from reporting for duty at an Amplats' mine.

"How can we be satisfied with an offer that does not address the living wage, a decent salary that we are demanding which is 12,500 rand? But we will take the offer to our members, it's for them to decide," a subdued Gama said.

"We cannot say talks are amicable because we did not get the offer that we want, but they are cordial. If the parties are still far apart, it's difficult to know when it is going to be resolved," he said.

The AMCU has been demanding minimum entry-level pay of 12,500 rand ($1,100) a month from the three platinum producers, which would be more than double current levels.

The three companies say they can ill afford such increases as they struggle to recover from a wave of wildcat strikes, rooted in a turf war between AMCU and the rival National Union of Mineworkers (NUM), which battered the sector in 2012 and led to the killings of dozens of people.

The producers' previous disclosed offers were for wage hikes of between 7.5 and 8.5 percent, above the current inflation rate of 5.4 percent.

But the typical South African mine worker has eight dependents and often two families, one near the mines and the other in their rural home villages, and so even above-inflation raises do not always go far to meet household budgets.

This stokes their demands but could pressure them to take a deal as it is also hard to go for long without a regular wage.

Implats spokesman Johan Theron told Reuters the company's wage bill in 2013 was around 7 billion rand and its last disclosed offer would add almost 600 million rand to that.

Minimum wages in the sector are around or just below 5,000 rand a month but if various allowances and other contributions are included, miners at the bottom of the platinum pay scale usually get closer to 9,000 rand a month.


Also on Wednesday, Amplats, a unit of Anglo American, said its output rose by 25 percent to 520,300 ounces in the fourth quarter as the company regained its footing from the violent 2012 stoppages, which tipped it into a loss that year.

Its share price rose over 5 percent, but the positive sentiment could be short-lived if the current strike drags on or turns violent.

Police said no one was hurt in the incident on Wednesday in which rubber bullets were fired, but it highlighted tensions around the platinum mines northwest of Johannesburg.

"The people up on top don't want to listen to our problems," an AMCU shop steward, who asked not to be named, told Reuters.

AMCU members who had earlier gathered in a stadium near Lonmin's Marikana operation dispersed peacefully after being told their leaders would address them there on Thursday.

Collectively the three firms are losing almost 10,000 ounces a day in output, worth about $14 million at current spot prices.

The strikes appear to have had little effect on spot platinum prices so far but are weighing on investor confidence in Africa's largest economy at a time when a global emerging market rout has seen the rand currency sink to 5-year lows against the dollar.

That rout forced South Africa's central bank to raise interest rates by 50 basis points on Wednesday in step with other emerging markets.

The strikes are also an unwelcome distraction to President Jacob Zuma and his ruling African National Congress ahead of elections expected in around three months' time.

(Additional reporting by Tosin Sulaiman in Marikana and Ed Stoddard in Johannesburg; Writing by Ed Stoddard; Editing by Sonya Hepinstall)