Platinum companies head for wage talks in difficult environment
Johannesburg-SA (Mar 18) Price-pressured platinum-mining companies are heading for wage talks burdened by the low dollar prices of their basket of platinum-group metals (PGMs) that even the weak rand has been unable to increase meaningfully. “We’ve got to make sure this year’s wage increases aren’t unsustainable given this very, very difficult environment that the platinum industry finds itself in,” Anglo American Platinum (Amplats) CEO Chris Griffith outlines in an interview with Creamer Media’s Mining Weekly Online. (Also watch attached video). While the weak rand has sent the rand price of gold sky high, the same has not been the case for platinum. This is because, unlike the price of gold, which has risen in dollars and soared in rands, the dollar prices of platinum, palladium and the other metals in the PGMs basket have all fallen so steeply that they are still below the already-tough 2015 average in dollar terms.
The platinum price in dollars is $50/oz less than last year’s average and the palladium price $245/oz less – $555/oz now versus the $800/oz of 2014. In the case of Amplats, the major fall of the dollar PGM basket price to $1 650/oz from $2 400/oz in 2014 means that, even in rands, the rand PGM basket of the world’s biggest platinum company remains where it was in 2015 – “and we know what a difficult environment 2015 was”, Griffith reminds. “I think we should be expecting the labour leaders to be able to carry that message through into wage negotiations, which are never easy,” he adds. While platinum prices have been subdued since 2009, costs have risen appreciably on above-inflation wage increases – without matching productivity – and soaring electricity price increases.
This is a backdrop that is giving rise to hopes that union leadership along with platinum mine employees may temper their wage demands this time round. “It’s very important that we don’t have unsustainable cost increases. We’ve got to find the balance,” Griffith emphasises. A repeat of 2014’s five-month strike across the Rustenburg platinum belt is too ghastly to contemplate. “I do think there’ll be sanity among the union leaders and employees to have a fair settlement,” says Griffith, who does not foresee major labour disruption this year. SECRET BALLOTING Much store is being placed by mining companies in the commitment of government to ensure that strike ballots are cast confidentially and no longer by a public show of hands. “The industry is still looking to government to be able to deliver on those promises because overall in the long term that’s the kind of thing that we need to bring more labour stability,” says Griffith, who regards as “job friendly” the decision of Amplats to sell two platinum mines and dispose of interests in two joint venture (JV) companies – Rustenburg and Union platinum mines and the Pandora and Atlatsa JVs.