Amplats’ South African Pay Accord Spurs Union Recruitment

A wage deal between Anglo American Platinum Ltd. (AMS) and two South African unions has spurred recruitment efforts that threaten to weaken the dominance of the company’s biggest labor group.

“We’ve already seen good numbers coming over to us,” Franz Stehring, head of mining at the UASA labor organization, said today by phone after reaching an accord with the company known as Amplats on Dec. 11. “We’re able to show the benefit; I think more will join us in the next few days.”

UASA and the National Union of Mineworkers accepted Amplats’ offer to raise wages as much as 8.5 percent, leaving the Association of Mineworkers and Construction Union holding out for a better deal. Rivalry between labor groups last year degenerated into protests and violence at some mines, which hurt output and helped erase profit at Amplats and other producers.

The NUM, until recently the biggest union at South Africa’s largest platinum producers, is reversing its loss of members at Amplats, Lesiba Seshoka, a spokesman, said today. Any worker who is a member of the NUM or UASA by Dec. 18 will get the increase, backdated to July, at the end of December, Stehring said.

The agreement also will be extended to non-unionized employees, Mpumi Sithole, an Amplats spokeswoman, said today by phone. Members of the NUM, UASA and unaffiliated employees account for about 39 percent of the workforce, she said.

AMCU Demands

The AMCU is demanding that basic wages be more than doubled to 12,500 rand ($1,205) a month. Its refusal to accept the deal means its members, which represent 60 percent of Amplats employees, won’t receive the 8.5 percent increase.

“This is a democratic country; anyone can voluntarily leave AMCU if they feel it is not serving their needs,” Jimmy Gama, the union’s national treasurer, said today by phone. “Our members who know what they want, they will stay to fight for a living wage.”

A state mediator on Nov. 13 gave the AMCU permission to strike after talks with Amplats failed. The union will meet its members in January, after a two-week break, to decide on a possible stoppage, Gama said.

The AMCU will also resume talks with Impala Platinum Holdings Ltd., the largest producer of the metal after Amplats, in January, company spokesman Johan Theron said today. On Oct. 28 the union decided to strike at Impala, without setting a date. The AMCU lowered its wage demand in November to 8,668 rand a month as Impala raised its offer to 8.5 percent. Workers currently earn 5,500 rand a month excluding benefits.

Lonmin Talks

The AMCU’s talks with Lonmin, the third-largest producer, stalled on Dec. 10 as a mediator gave the union permission to strike. The AMCU will weigh its options in January, Gama said.

The only platinum producer already suffering a strike is Northam Platinum Ltd. (NHM), where workers have been absent since Nov. 3. The stoppage at Northam, where the NUM remains the largest union, will continue into 2014 after the company postponed talks, Ecliff Tantsi, the NUM’s chief negotiator at Northam’s Zondereinde mine, said today. The union has rejected a wage-increase offer of as much as 9 percent, which compares with a South African inflation rate of 5.5 percent in October.

Striking employees have lost 74 million rand in wages so far, according to Northam, which said today it has lost about 450 million rand in revenue.

The NUM is holding out for a better deal at Northam than at Amplats on the request of its members, Tantsi said.

To contact the reporters on this story: Andre Janse van Vuuren in Johannesburg at ajansevanvuu@bloomberg.net; Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net

To contact the editor responsible for this story: David Risser at drisser@bloomberg.net

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