Platinum firms, AMCU weigh 16% wage offer

June 2, 2014

Johannesburg (June 2) THE strike at South Africa's platinum mines could end this week with a wage offer of increases of up to 16% for the neediest underground mineworkers.

Over the weekend, the government’s task team put together a settlement package that the Association of Mineworkers & Construction Union (AMCU) will start proposing to its members from today. It involves mineworkers receiving increases of at least R800 a month for five consecutive years.

This will increase the basic wage at Anglo American Platinum (Amplats), which pays the lowest basic wage, to R9,000 per month in 2017, and at Lonmin, which pays the highest wages, to R9,713 in 2017.


This still does not meet AMCU’s demand to reach a basic salary of R12,500 per month in the present negotiation cycle, and all sorts of ways were looked at last week to find money to increase the wage offer, which bogged down at increases 9% and 9.5%.

The three platinum producers, Lonmin, Impala Platinum (Implats) and Amplats, have also not yet agreed to the increases, but their negotiators will present the offer to their managements and shareholders.

They and AMCU will presumably report back to the government’s task force led by Godfrey Oliphant, deputy minister of Mineral Resources, by the end of the week.

Oliphant and other mediators “kicked the ball around” between the three platinum groups and AMCU for several days last week to try to find a mutually acceptable settlement proposal and end the longest and most harmful strike in the country’s history.

If the efforts fail, the government will try to force the parties to submit to a mandatory arbitration process because the effect of the strike on related parties is already serious.

The National Economic Development and Labour Council (Nedlac) was this weekend instructed to begin preparing to enforce an arbitration process for AMCU and the three platinum producers. This is in response to warnings by top economists that the strike could send the economy into a recession unless it is soon ended.

The three platinum producers made an offer that would involve minimum increases of R800 per month for five consecutive years as early as Tuesday. Until that stage, the offer was for increases of between R500 per month at Amplats and R580 per month at Implats.

The offer was subject to AMCU, whose nearly 80,000 members have been striking since 23 January, recommending the offer to its members.

AMCU’s advisor, the Independent Alternative Development Group (AIDG), advised the union not to accept the offer because the platinum companies had not provided sufficient information about their cost structures.

On Thursday and Friday there were intense exchanges of information with ways being sought to increase the offer, said sources.

They even considered using money that the mining companies would spend on corporate social development programmes, such as housing projects, for wages instead. However, the three mining companies were not prepared to do this. A downgrading of the development programmes could mean that they would soon not meet the requirements of the mining charter.

The only other way to reach AMCU’s demand for R12,500 a month would be to cancel the living-out allowance and include it in the mineworkers’ basic wage.

The living-out allowance, which was negotiated by NUM as a substitute for hostel residence, is in any case regarded as bad because it encourages squatting.

At Implats the living-out allowance now amounts to R1,850 per month. At Lonmin it is R1,950 per month and at Amplats R1,737 per month.

It’s fairly certain that the eventual settlement will mean that the living-out allowance will become part of the basic wage, which will bring the basic wage within the range of R12,500 per month.

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