South Africa's Amplats takes action against strikers

Reuters News
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Posted: Sep 27, 2012 12:14 PM
South Africa's Amplats takes action against strikers

By Agnieszka Flak

RUSTENBURG, South Africa (Reuters) - The world's top platinum producer, Anglo American Platinum, began disciplinary action against illegal strikers on Thursday and rival Impala Platinum offered workers a pay rise as the South African mining industry struggles to end weeks of labor unrest.

A wave of wildcat strikes is disrupting South Africa's mining sector despite the end of an illegal six-week stoppage at another platinum producer, Lonmin, in which 46 people were killed.

In a bid to avert a strike, Impala Platinum offered a "pay adjustment" to workers demanding an increase, saying it would add almost five percent to its wage bill.

An illegal stoppage at Implats would have brought the labor unrest full circle this year as its Rustenburg operation, the world's largest platinum mine, was brought to a halt for 6 weeks in January and February amid a bloody union turf war between the militant Association of Mineworkers and Construction Union (AMCU) and the dominant National Union of Mineworkers (NUM).

There was a heavy police presence in the area Thursday afternoon, with armored vehicles and a water cannon on standby while a helicopter thumped overhead.

Thousands of workers gathered in an amphitheatre near Implats' Rustenburg mine to listen to AMCU leaders.

"Management adjusted all salaries across the board. We didn't get the 10 percent we wanted but we got something we can work with. We will continue talks with management next week. We will not go on strike while we are talking," Khayalethu Mzimeli, an AMCU representative, told Reuters after the meeting.

African National Congress outcast Julius Malema, a populist who has backed the wildcat strikes and called for the nationalization of South Africa's mines, had been due to address Implats workers to encourage them to press for higher wages, but he failed to show.

Malema, the former head of the ruling ANC's Youth League who was ousted from the party for ill-discipline in April, is exploiting anger among miners to revive his political career and his campaign to unseat President Jacob Zuma.

NO END TO OTHER STRIKES

Elsewhere, strikers stayed off the job.

Amplats, a unit of global mining giant Anglo American, said attendance at its four mines near Rustenburg, 120 km (70 miles) northwest of Johannesburg, remained below 20 percent despite repeated threats to get tough.

Amplats' chief executive Chris Griffith said on Wednesday the company would start making good on threats to sack workers if they did not report for duty within 24 hours.

"Despite repeatedly urging our employees to come back to work, attendance at our Rustenburg operations remains low," he said on Thursday. "We have been left with no choice but to initiate disciplinary action, which could lead to dismissals."

Amplats shares gained over 3 percent after shedding over 6 percent on Wednesday.

Rustenburg labor activist and community representative Mametlwe Sebei said striking Amplats workers were not intimidated by the ultimatum.

"No amount of threats are going to move our workers from their demands," he told Reuters.

The demands include an increase in a minimum monthly wage to 12,500 rand ($1,500), more than double that currently earned by those at the bottom of the pay scale.

When Impala fired 17,000 illegal strikers in the same area in January, it unleashed the wave of violence that shut the mine for 6 weeks.

South Africa is home to close to 80 percent of the world's known reserves of platinum, the white metal used in catalytic converters that reduce exhaust emissions from cars, but the industry is grappling with soaring costs and weak demand.

Griffith said this week the sector was in crisis while Lonmin is expected to seek funding from the market with a rights issue to shore up its balance sheet.

Implats is regarded as the most profitable of the big producers but analysts say there are limits to what it can offer.

"Implats has traditionally been better managed but would need to be careful to ensure their costs don't edge too high," said Rezco Asset Management investment director Rob Spanjaard.

The impact of the strikes on Africa's largest economy was highlighted on Thursday by a Moody's Investor Service downgrade, which pulled South Africa's government bond rating down one notch, citing violence and illegal strikes at the mines.

Close to 75,000 workers are on strike or being prevented from going to work in South Africa's mining sector, including at mines run by the world's third- and fourth-biggest bullion producers, AngloGold Ashanti and Gold Fields.

(Additional reporting by Pascal Fletcher and Sherilee Lakmidas; Writing by Ed Stoddard; Editing by Giles Elgood)