Implats Terence Goodlace
JOHANNESBURG (miningweekly.com) – A day before the Association of Mineworkers and Construction Union (AMCU) leads a 80 000-strong strike in the platinum sector, the CEOs of Anglo American Platinum (Amplats), Impala Platinum (Implats) and Lonmin Platinum have warned that the union’s unrealistic and unaffordable wage demands cannot be met.
Amplats CEO Chris Griffith, Implats CEO Terence Goodlace and Lonmin CEO Ben Magara have stood firm in their view that the impending strike action will be to the detriment of the platinum industry, employees and their families, communities and South Africa.
The trio, which this week confirmed receipt of the 48-hour strike notice from AMCU, said in a statement that the union was making promises to employees that cannot be delivered.
“This is a time when the industry can ill afford further losses of production and jobs due to strike action,” the companies’ leaders said.
Strike action in 2012 and 2013 had led to a combined loss of 879 400 oz of production and R12.54-billion in revenue, while workers forfeited wages of R1.18-billion, excluding the loss of bonuses and other benefits.
This, in conjunction with a declining platinum price, which plunged 19% over the past three years, and ever-rising costs, led to a reduction in the industry workforce from 145 000, in December 2011, to less than 134 000 by December 2013, the platinum producers added.
Nomura economist Peter Attard Montalto said AMCU, with about 70% membership in the platinum sector in Rustenburg, was “clearly” aiming high, but this meant the possibility of failure was higher.
“It would be simple to say the AMCU's demands are totally unaffordable, but another way to look at it is that mining companies could afford them, but only with considerable jobs losses, mechanisation – which is not appropriate in most mines given how thin the seam of ore is – and an artificially inflated platinum price through policy intervention,” he said.
While some meaningful wage increases and one-off return-to-work bonuses were expected as companies attempt to stop the strike dragging on too long, the companies were also likely to use this opportunity to “reset”, Attard Montalto said, citing possible job cuts or an extended shutdown that would enhance forward margins.
AMCU was seeking a more than double monthly wage increase to R12 500 for entry-level workers at Amplats and Lonmin, and just over R8 500 for workers at Implats – a reduction on the R12 500-a-month demand made last year.
Implats, Amplats and Lonmin were offering between 8% and 8.5% for employees in the A- and B-band bargaining unit, which comprised category 4 to 8 employees, and 7.5% for C level employees, which included miners, artisans and officials.
Accommodation and other allowances would also be increased.
“These offers compare favourably with increases in other sectors and are above the current inflation rate of 5.3%. It is important to note that the platinum industry has also extended wage increases substantially above the inflation rate in preceding years and, currently, pays among the highest entry-level wages in the country,” the trio concluded.