Striking South African miners agree to talks

Tens of thousands of striking workers at South Africa’s top three platinum producers agreed Thursday to take part in government-brokered talks aimed at ending the dispute and limiting economic damage.

The Association of Mineworkers and Construction Union, who led roughly 80,000 miners to down tools Thursday, said it “will be part of the negotiations” tentatively planned for Friday.

The union went on a legal strike demanding entry-level wages be more than doubled to $1,150 and better working conditions.

“The strike is still going, there is no agreement, no settlement yet,” said AMCU president Joseph Mathunjwa cautioned.

In a sign of how seriously the risk of economic damage and unrest is being taken in government, the talks are expected to be led by Deputy President Kgalema Motlanthe.

Top three companies Anglo-American Platinum (Amplats), Impala Platinum (Implats) and Lonmin, had described AMCU’s demands as unrealistic and unaffordable.

But with share prices already pummelled by a wave of strikes that firms say cost them as much as $1.2 billion in lost revenue, the companies welcomed the talks.

“We are committed to finding a positive and sustainable resolution to this dispute, and management continues to engage at all levels to seek agreement,” said Lonmin CEO Ben Magara.

But the walkout is still likely to bite.

Implats reported attendance as low as 10 percent Thursday at facilities in the platinum belt north of Johannesburg.

Meanwhile Amplats spokeswoman Mpumi Sithole said the firm expects “production to be impacted by the strike action.”

Lonmin said it expects losses to be in the region of 3,100 ounces per day during the strike.

Fearing the industrial action could spark violence in a region where over 40 people were killed during a wildcat strike in 2012, mine owners began shuttering operations on Wednesday night.

Police have stepped up security, but also ordered the organisers of the industrial action to “ensure that their strike is peaceful and they adhere to the picketing rules”.

In previous strikes, non-union staff and members of rival unions have reported being threatened if they refuse to take part.

On Thursday the National Union of Mineworkers (NUM) claimed that at least 70 of its members had been bullied away from reporting for duty as the strike started.

“There are high levels of intimidation,” NUM spokesman Livhuwani Mammburu told AFP, adding that one of the union’s member was “severely assaulted for refusing to join the strike” at Implats.

Tensions are undoubtedly high, and neither the unions or the companies can afford to capitulate.

After promises of vast wage hikes lured hard-up workers from rival unions, AMCU must prove to members it can deliver.

“We will continue our strike for as long as our demands are not met,” vowed Jack Khoba, an AMCU leader at Lonmin.

Oliver Thipe, a 28-year-old rock drill operator at Amplats, was confident “we are going to get what we want”.

“We have been struggling for a long time for the wages. This is the time for a better living wage. AMCU will bring it,” he said.

But platinum firms, reeling from previous industrial action and facing growing competition abroad, must prove to boards and shareholders they still have a viable business model.

Dire consequences

The strike is already causing ripples across the South African economy, with platinum prices rising and the rand weakening.

“Our economy is stressed enough already and another strike in the mining industry would have dire consequences,” said Labour Minister Mildred Oliphant.

South Africa is the world’s largest platinum producer and around 134,000 workers employed in the sector.

Platinum and related metals are used in products from catalytic converters to computer hard disks to dental fillings.

And in a country where as many as one in three workers is unemployed, there are also fears of further job losses.

Amplats, Implats and Lonmin issued a rare joint statement on Tuesday, warning 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.

But unions are adamant that the country’s mining firms, with billions of dollars in revenue, can afford to pay out more.

Anger at vast income disparities is raw in a country that even 20 years after the end of apartheid remains one of the most unequal on earth.