Platinum Miners Reach Tentative Deal With South African Union

London (June 12)   Lonmin PLC Thursday said it has reached a tentative deal over wages and working conditions with the leadership of the union that has brought the South African platinum mining industry to a halt for months.

In a statement, the company said the two sides have reached "informal undertakings" in principle on a potential deal. Peers Anglo American Platinum Ltd, part of Anglo American PLC, and Impala Platinum Holding Ltd have received the same in principle undertakings, it added.

"The companies expect to receive feedback from "the Association of Mineworkers and Construction Union" on Friday, 13 June. Thereafter, and should an agreement be reached, the companies will be assisting employees to ensure a safe return to a normal working environment," Lonmin said.

The news comes after talks set up by South Africa's Minister of Mineral Resources to solve the ongoing strikes that are crippling the platinum mining industry in the country and weighing on its economic growth dissolved without an outcome on Monday.

The strikes, now in their 21st week, have cost mining companies over ZAR21.7 billion, according to the companies. Striking miners, meanwhile, are believed to have missed out on over ZAR9 billion in wages.

The companies have put several offers on the table, but the union has been holding out for a bigger wage increase.

Lonmin shares were up 6.4% at 251.9 pence in the wake of the news, the biggest gainer on the FTSE 250. However, Anglo American was down 2.8% at 1,424p, making it one of the biggest decliners on the FTSE 100 after Morgan Stanley cut its rating on the stock to Underweight, from Equalweight, amid a wider warning over weaker-than-expected iron ore prices in coming years.

Source: Allaince News