JOHANNESBURG (miningweekly.com) – National Union of Mineworkers (NUM) members would march to JSE-listed Northam Platinum’s head office on Tuesday, as the strike at the company’s Zondereinde mine, which was entering its fourth week, continued.

This comes amid a warning from Northam CEO Glyn Lewis and GM Danny Gonsalves at the weekend that a protracted strike would undermine the long-term viability of the platinum miner and could threaten jobs.

The executives noted in an open letter to NUM general secretary Frans Baleni, published in the media, that the company was concerned that the circumstances of the industry, and of Northam in particular, had not been fully considered by the union, and was not fully appreciated by employees, adding that the impact of the ongoing strike on Northam’s future, as well as that of its employees and the communities in which it operated was likely to be significant.

In the letter, Lewis and Gonsalves said that, unlike other platinum miners, the company had not yet retrenched any employees to cut costs.

“We would hope to continue on that track. But this strike has so far cost the company more than R200-million in lost revenues. Given our capital programme to remain in business, expand and retain jobs, the company has now, for the first time, had to incur debt," they stated.

The platinum miner indicated that the strike was costing it R14-million a day, while striking employees had lost a collective R30-million in wages.

“Considering that we estimate that each employee supports between five and 10 people, that means around 70 000 people are potentially without a source of income,” the company said.

It further called on the union to consider and inform its members of the current tenuous position of the platinum industry, with South Africa currently supplying only 50% of the global platinum demand, as opposed to 80% in 2005, while platinum prices were in the region of $1 410/oz, down from $1 540/oz as recently as August.

Meanwhile, the NUM said it was disappointed over the writing and publication of the open letter, stating, "for the benefit of all [and] sundry, the NUM wishes to put on record that it successfully avoided joining the wildcat strikes that characterised the platinum belt in 2012 to 2013. We did so out of discipline and care for the sustainability and future of the company, Northam and our members. The open letter is a clear demonstration of lack of appreciation [for] this gesture by the union".

"Currently, we have gone on a legal strike action, once more demonstrating maturity and respect for the rule of law because we are committed to peaceful and bloodless resolution of worker issues with management. It is extremely regrettable that both [Gonsalves] and [Lewis] are failing to embrace the care we have demonstrated in a period of difficult attacks on the NUM in the platinum belt," the union added.

Northam, meanwhile, stated that its two-year offer of wage increases of 9% for core and 8% for noncore employees, as well as an 8% increase in the living-out allowance, was its final offer, as any further movement of the offer would put the company’s future at risk.

However, the NUM had declined this offer and was sticking to its demands of a R2 000 increase in basic wages for noncore employees, which was equivalent to a 22% to 42% increase, and an increase of R2 100 in basic wages for core employees, which was equivalent to an increase of between 23% and 43%.

Further, the union was also demanding that the living-out allowance be increased by 69% from R2 200 to R3 718 monthly, staggered in two tranches over six months.

The NUM also did not want to agree to a multiyear agreement.

Northam stated that it remained hopeful that, through constructive engagement and with an acknowledgement of the country’s economic imperatives, it could reach an agreement with the NUM, which would result in a realistic cost base for the business in the longer term and ensure its continued sustainability.

The NUM said it was still open for further constructive negotiations with Northam.