South Africa platinum firms warn strike will hurt workers

Leading South African platinum producers hit out at “unaffordable and unrealistic” wage demands from workers planing to go on strike from Thursday, warning previous industrial action has already cost jobs.

Top global platinum firms from Lonmin, Impala Platinum and Anglo American Platinum issued a rare joint statement on Tuesday, in a bid to persuade around 80,000 workers not to down tools.

Insisting demands from the Association of Mineworkers and Construction Union for a minimum monthly wage of $1,150 were “unaffordable and unrealistic” the firms said the sector “currently pays amongst the highest entry level wages in the country.”

The union claims entry-level workers currently earn around $460 a month.

The trio warned that previous strikes, rising operating costs and a sharp drop in platinum prices had resulted in the loss of around 11,000 jobs since December 2011.

They also claimed strike action directly cost them $1.2 billion in lost revenue and workers lost $110 million in lost wages over roughly the same period.

Around 134,000 people work in the platinum sector in South Africa — the world’s largest producer.

Gold miners linked to AMCU are also expected to go on strike.

According to Nomura bank analyst Peter Attard Montalto, both AMCU — whose hardline demands helped it recently become the biggest union in the sector — and the platinum firms could use the strikes to further their goals.

“AMCU must also show to its members, other unions and mining companies that its structures are in place and that it is the real deal,” he said.

“The companies are also likely to try to use this opportunity to reset things – be it deal with job cuts or an extended shutdown that enhances forward margins.”

Meanwhile the South African government, heading to elections expected in the first half of the year, has rallied to limit the impact of any stoppage.

On Tuesday it urged the strikers to ensure that their protests are peaceful and short, amid fears over violence and damage to the economy.

“Whilst workers have the right to protest, as enshrined in the Constitution of the Republic, we encourage the protest to be within the confines of the law,” said government spokeswoman Phumla Williams.

Giving an annual address to organised labour Tuesday, South Africa’s labour minister Mildred Oliphant called for union leaders to take a firm stand against protest violence and to look again at “the wisdom of prolonged strikes.”

“After a certain period of sustained action, the strike ceases to be a weapon for workers interests but an arrow that inflicts pain and wounds in the workers themselves,” she said.

In 2013 strikes in the mining, automotive and transport sectors trimmed already modest growth in Africa’s largest economy.

The only way is up

Oliphant acknowledged that the last year was “highly contested” and “marked by conflict and controversy” in terms of labour relations.

But, she said, things can only improve.

“It can only get better from here and that will be possible if we make a commitment to work together in addressing the many challenges that face us.”

The strikes come against the backdrop of a country with soaring inequality and high unemployment, which officially stands at 25 percent.

The African National Congress-led government hopes to create 2.8 million new jobs by 2015, but its reform efforts have been thwarted by the left wing and union allies.

Oliphant dismissed calls from the International Monetary Fund and others for South Africa to implement labour reforms quickly.

“There are also some who are clearly of the view that our labour legislation is too restrictive and that the South African labour market is over-regulated. We certainly don’t think so.”

That is unlikely to sit well with investors, who have labelled South Africa one of the “fragile five” economies — along with Brazil, India, Indonesia and Turkey.