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Talks to end South African miners’ strike collapse

Published on 05/03/2014

Talks aimed at ending a crippling six-week-long platinum miners' strike in South Africa fell apart on Wednesday after producers rejected a revised wage demand.

Negotiations “have been suspended indefinitely to allow stakeholders time to reflect on the current offer,” the world’s top platinum producer Anglo American Platinum (Amplats) said in a statement.

The radical AMCU union, which represents tens of thousands of platinum workers, had appeared to soften its position on Tuesday, saying its wage demand could be spread over four years.

But mining companies said the new demand was just unrealistic and translated to an increase of up to 35 percent year-on-year over a four-year period.

Amplats, Impala Platinum (Implats) and Lonmin — the world’s top three platinum producers — had offered staggered increases of seven to nine percent over the next three years.

Their offer is well above the current South African inflation rate of 5.4 percent.

“We remain far apart,” said Chris Griffith, CEO of Amplats and Ben Magara, CEO of Lonmin in a joint statement.

Amplats, which says it is losing 4,000 ounces of platinum a day due to the work stoppage or 100 million rand ($9.3 million) in daily revenue, said was “discouraged” by the collapse of talks.

Implats said the discussions “have unfortunately not managed to secure a resolution to the industry wage dispute” forcing an open-ended adjournment.

Government mediators said they had “decided to adjourn the process to give all parties an opportunity to reflect on their respective positions”.

The parties “still remain far apart at this stage,” they said.

– ‘Whatever means necessary’ –

The Association of Mineworkers and Construction Union (AMCU) has vowed to achieve its goal of a $1,125 (820 euro) minimum monthly wage by whatever “means necessary”. The union is now threatening to widen its strike action.

The union’s demand was at the centre of the 2012 deadly strike at Lonmin, when police killed 34 mineworkers on August 16, 2012.

AMCU secretary general Jeff Mphahlele told AFP however that the talks “have not been abandoned”, adding he was waiting for the companies to respond formally to their offer.

The companies said they remain open to further talks to help end the strike, but warned that the union need to consider the economic realities.

“We are hopeful though that AMCU will come to recognise and appreciate the realities of the company’s position and will work towards a solution that will benefit its members,” said Griffith.

AMCU has threatened to widen the strike action which started on January 23.

“We have done our utmost best — starting at 12,500 rand over one year, then we extended it to say pay over two years, three years and now we are at four years. They are still crying foul. We don’t know what to do,” said Mphahlele.

“We will intensify our strike,” he said.

The union plans to march on the seat of government on Thursday to increase pressure on President Jacob Zuma.

Lonimn said the strike has so far cost it 90,000 ounces of the metal that is used in products from catalytic converters to computer hard disks and dental fillings.

It will not achieve its annual sales target of over 750,000 ounces, it announced in a statement.

The plight of striking workers who have so far lost six weeks of wages, is also of concern to the mining bosses.

“The longer the strike continues, the greater the impact on our … ability to return to a normal operating environment and obviously on jobs,” warned Lonmin’s Magara.

South Africa holds around 80 percent of the world’s known platinum reserves.