Amplats Mines Disrupted as 5,600 South Africa Workers Strike

Anglo American Platinum Ltd. (AMS), the world’s biggest producer of the metal, said 11 percent of its workers went on strike less than a week after a state-sponsored peace accord failed to win unanimous agreement from unions.

About 5,600 striking workers at the Thembelani and Khuseleka 1 mines in South Africa are demanding that suspended officials from the Association of Mineworkers and Construction Union are reinstated, the Johannesburg-based company known as Amplats said in a statement today. The stoppage is unauthorized, the Anglo American Plc (AAL) unit said.

The AMCU was the only union that last week refused to sign the agreement aimed at bringing stability to mines as pay negotiations begin. Falling precious metal prices are constraining companies’ ability to meet union wage demands higher than a year ago, when strikes and inter-union conflict spilled over into violence that led to at least 44 deaths.

“Strike action has been surprisingly subdued in South Africa, and we wait to see whether this triggers action at other sites as wage negotiations advance against a background of inter-union tensions,” Investec Plc (INVP)’s Global Natural Resources Research Team said in a note today.

Aside from seeking a reversal of the ban on the union officials for joining a sit-in protest, the workers also want job cuts scrapped and a guarantee that a rival union be banished from Amplats mines, the company said. Production was disrupted at Thembelani last night and at both mines during the morning and afternoon shifts, it said.

No Violence

There have been no reports of violence since the strike started, Sabata Mokgwabone, a spokesman for the South African Police Service, said in a phone interview.

Jeff Mphahlele, general secretary for the AMCU, said some of the union’s members didn’t go to work at Thembelani, declining to give further details.

Rivalry between the National Union of Mineworkers and the AMCU, which has been winning employees from NUM, has escalated tensions at mines across the country. Last month miners at Thembelani, about 120 kilometers (75 miles) northwest of Johannesburg, temporarily trapped 2,400 of their colleagues underground as part of a union dispute.

Today’s striking workers are demanding Amplats give a guarantee that NUM won’t be allowed to return to the company’s operations, the platinum producer said.

Job Cuts

Inter-union disputes have led to three workers’ deaths since May in the Rustenburg area. Last year’s violence included the deaths of 34 protesters killed by police in a single day near Lonmin Plc (LMI)’s Marikana platinum mine.

Amplats is planning to cut 6,000 jobs as part of an effort to return to profit by idling three shafts and reducing annual output by 350,000 ounces of metal. Talks with unions about the proposal are due to end on Aug. 10.

Lonmin, the world’s third-largest platinum producer, said today that the NUM has brought a court application relating to its membership numbers and those of AMCU. The platinum producer said it couldn’t comment further before the hearing. NUM is disputing the authenticity of AMCU’s membership numbers, spokesman Lesiba Seshoka said last week.

“The company’s wider position remains that it wishes the issue of union status at its operations to be resolved peacefully, and as quickly as possible, for the benefit of all stakeholders,” Lonmin said in the statement.

Peace Appeal

Deputy President Kgalema Motlanthe was appointed by President Jacob Zuma to broker a solution to mine labor unrest, leading to last week’s peace accord. The agreement was signed by the Chamber of Mines, which represents producers, government departments and labor unions apart from the AMCU, which is led by former NUM official Joseph Mathunjwa.

“Anglo American Platinum would like to urge all employees and their union representatives to live by the spirit of the deputy president’s peace and stability framework and to promote the peaceful co-existence of all the recognized unions at our operations,” Amplats said in its statement.

The rand gained 0.5 percent to 10.1554 per dollar by 4 p.m. in Johannesburg, after slumping as much as 0.9 percent earlier to the weakest level since June 24. Amplats rose 2.5 percent to 286.7 rand by 4:15 p.m. in the city.

While platinum has dropped 13 percent this year, gold is 27 percent lower. A weaker gold price is hampering the ability of producers of the metal to meet wage demands, according to the Chamber of Mines, which represents South African bullion miners.

The mines chamber today hosted a pre-wage negotiation meeting with unions aimed at winning agreement on how talks will be conducted.

Entry-level underground gold miners receive a minimum wage of 5,000 rand ($487) a month. AMCU is seeking to more double this figure to 12,500 rand while NUM wants a 60 percent increase.

South African workers may strike with their jobs protected as long as an independent mediator agrees to the stoppage and talks between unions and companies have failed.

To contact the reporter on this story: Kevin Crowley in Johannesburg at kcrowley1@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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