South Africa's Platinum Mines Say Striking Union Makes New Demands

June 18, 2014

Johannesburg-S.A. (June 18)   South Africa's platinum-mining industry said on Wednesday that the industry's main labor union has made fresh demands that go beyond a preliminary accord struck last week, a move which could delay a definitive agreement to end a long-running strike.

The country's biggest platinum-mining companies said the Association of Mineworkers and Construction Union wants the new wage agreement to run for three years rather than the five years the mining companies have proposed.

South Africa's Strikes to Weigh on Growth 

The AMCU, which has led a 21-week long strike by more than 70,000 mine workers, also wants a once-time payment of roughly $270 to each worker, people involved in the mining talks said. The union also wants  Lonmin  LMI.LN -1.13%     PLC, the country's third-biggest platinum producer, to rehire 235 workers it recently dismissed for participating in the strike.

The AMCU didn't respond for comment.

 Anglo American Platinum Ltd.  AMS.JO +1.18%     , the world's biggest platinum supplier, and the union are scheduled to meet Wednesday afternoon to discuss the new demands which management reckons are unaffordable, company spokeswoman Mpumi Sithole said.

 Impala Platinum Holdings Ltd.  IMP.JO -0.33%     spokesman Johan Theron said some of the new issues raised by the union are "problematic" and that it "could still take some time" to sign a deal.

Anglo American Platinum, Impala Platinum, and Lonmin ast week said they had reached an agreement in principle with the union to end the strike.

The industrial action has cut into South Africa's economic growth and cost the companies more than $2 billion in lost revenue.

The AMCU has demanded nearly tripling the entry level salary of platinum workers to 12,500 rand ($1,153) a month but agreed that wages could reach that level over several years.

The companies last week proposed increasing workers' annual salaries by ZAR1,000 a month for the next two years and then ZAR950 thereafter. After holding meetings with workers at each of the companies last week, the AMCU leadership said there remained a few issues that needed to be addressed before it signed an agreement.

In a speech to South Africa's parliament Tuesday night, President Jacob Zuma said companies, government and labor must meet to resolve the "untenable labor relations environment on the economy."

Stirring up emotions in the platinum-mining communities, the Economic Freedom Fighters, a political party run by Julius Malema, a firebrand who was ousted from the country's dominant African National Congress, promised over the weekend to donate around $4,500 to the strike and to investigate whether the ZAR12,500 demand is affordable for companies.

Many mine workers have said they are ready to come back to work. Lonmin employee Mbulelo Magula said the new offer was much better than anything before but that he would wait for a final decision by his union before returning to his job.

Source:  WSJ

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