Top-Tier Platinum Producers Face Wage Strike in S. Africa

Lonmin Plc (LMI) and Impala Platinum Holdings Ltd. (IMP), two of the world’s top three platinum producers, will start receiving strike notices within days after a South African union called for a stoppage over pay.

The Association of Mineworkers and Construction Union, the biggest at the companies, will serve notice Jan. 20 and begin a strike at Lonmin Jan. 23 if demands aren’t met, President Joseph Mathunjwa said, without giving a date for an Impala walkout. Members at Anglo American Platinum Ltd. (AMS), the largest producer, will gather Jan. 19 to decide whether to strike.

“We are done with Lonmin, we are done with Impala,” Mathunjwa told thousands of workers who filled a soccer field and grandstands yesterday at the Wonderkop Stadium near Lonmin’s Marikana mine in the North West province. The country accounts for about 70 percent of global platinum production.

Many workers held umbrellas to ward off the sun in the near 100 degree-Fahrenheit (38 degree-Celsius) heat as Mathunjwa asked workers for a show of hands whether they wished to strike. No raised arms were visible when the union leader asked who opposed a stoppage.

The union won the right to strike at the companies last quarter, calling for entry-level pay to more than double to 12,500 rand ($1,144) a month. The AMCU also targeted the gold industry in South Africa, where producers including AngloGold Ashanti Ltd. (ANG) face strike notices over wage demands.

Negotiate Further

“It’s within AMCU’s right to call a strike, but we hope they first give us opportunity to negotiate further,” Johan Theron, a spokesman for Johannesburg-based Impala, said yesterday by phone. He said the company and the union’s negotiation teams haven’t met since Dec. 13.

Lonmin’s management didn’t agree with the demands from the union, Mathunjwa told the crowd, according to a translation of his comments. The company will have 48 hours to respond to a letter delivered on Jan. 20, or the strike will start on Jan. 23, he said.

Sue Vey, a spokeswoman for Lonmin, declined to comment.

Lonmin fell as much as 5.6 percent before closing 1.6 percent higher at 56.30 rand in Johannesburg. Anglo Platinum rose 2.7 percent to 405.81 rand and Impala climbed 2.8 percent to 120.06 rand.

The spot price of platinum rose for a second day, gaining 1.5 percent to $1,442.88 an ounce by 4:04 p.m. in London.

Marikana Killings

A six-week strike at Lonmin in 2012 ended after at least 44 people died, including 34 miners killed by police in a single day near Marikana.

Just as strikes appeared more likely at Anglo Platinum, Impala and Lonmin, a walkout at smaller producer Northam Platinum Ltd. (NHM) was resolved. The National Union of Mineworkers said today its members have accepted an improved pay offer from the company and will return to work as soon as Jan. 21, ending a stoppage that started Nov. 3.

South Africa accounted for 73 percent of global primary platinum production in 2012, when the industry employed 198,000 people, according to the website of the country’s Chamber of Mines. Platinum, palladium and rhodium made up 23 percent of the mining exports by Africa’s largest economy that year.

To contact the reporter on this story: Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net

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

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