The world’s largest platinum producers offered to more than double the wages of their lowest-paid workers within three years as a strike that has crippled operations entered a 13th week.
Anglo American Platinum (AMS) Ltd. and Impala Platinum Holdings Ltd. (IMP), the two largest producers, will increase the monthly wages of the lowest-paid underground workers to 12,500 rand ($1,191) a month by July 2017, the companies said in separate statements today after talks with the Association of Mineworkers and Construction Union. The union has led more than 70,000 workers in a strike since Jan 23.
Lonmin Plc (LMI), the third-largest, will offer a similar increase, Charmane Russell, a spokeswoman for the producers at Russell & Associates in Johannesburg, said by phone. The statements on the offers followed a meeting today between the companies and the union. The offer of R12,500 covers basic pay along with holiday and living-out allowances, the companies said. Other benefits bring the cost per employee to R17,500, they said.
The companies have increased their annual pay-rise offers from a previous position of a maximum of 9 percent to 10 percent, Anglo Platinum and Impala said. The companies “can ill afford the revised settlement offer,” they said in their statements. “Labor costs account for approximately 55 percent to 60 percent of annual production costs and unsustainable increases in these costs will be catastrophic.”
Platinum for immediate delivery fell 1.4 percent to $1,417 an ounce by 8:18 p.m. in Johannesburg, paring its gains since the beginning of the year to 3.4 percent.
Lost Billions
Anglo Platinum has so far lost 5.8 billion rand in lost revenue due to the strike, while Impala has lost 4 billion rand, the Johannesburg-based companies said. Workers at the three producers have forfeited more than 6 billion rand in lost wages, according to a website run by the companies.
The AMCU rose to prominence after at least 44 people died, including 34 in a single day, at Lonmin’s Marikana mine in August 2012, when workers downed tools in support of a demand to increase pay to 12,500 rand. The lowest-paid workers currently earn R5,000 to R6,000 a month.
The union in March said it will give companies four years from when an earlier wage agreement ended in 2013, to achieve the demand. The strike has shut some of the biggest mines in South Africa, which accounts for more than two-thirds of the world’s mined platinum, used for jewelery and as auto-catalysts in vehicles.
Talks between the parties will continue on April 22, Russell said.
To contact the reporter on this story: Andre Janse van Vuuren in Johannesburg atajansevanvuu@bloomberg.net
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