South African government-led talks to end platinum strikes that have crippled output from the world’s three-largest suppliers ended for the day with producers and the dominant union yet to make concessions.
“Nothing much in terms of proper negotiations were taking place today” as representatives from the companies held discussions among themselves, Association of Mineworkers and Construction Union Treasurer Jimmy Gama told reporters in Pretoria, the capital. The talks will resume tomorrow at 10 a.m., he said.
Workers at Anglo American Platinum Ltd. (AMS), Impala Platinum Holdings Ltd. (IMP) and Lonmin Plc are yet to reach an accord with employers on wage demands, which include calls by the AMCU to more than double entry-level pay to 12,500 rand ($1,115) a month. The dispute has weighed on the rand, which today traded at its weakest level in more than five years.
A strike that started Jan. 23 is costing Amplats, as the Anglo American Plc (AAL) unit is known, 4,000 ounces of production and 100 million rand in revenue a day, the company said Jan. 24. Lonmin is losing 3,100 ounces and Impala 2,800 ounces.
South Africa, with the largest known reserves of platinum, relies on metal exports for more than half its foreign-exchange earnings, and disruption at the mines has led to a burgeoning current-account deficit. President Jacob Zuma has dispatched Labour Minister Mildred Oliphant to facilitate talks between the companies and the AMCU.
The rand, the currency in which the companies pay most of their costs, weakened for a fourth day against the dollar, in which revenues are received, falling to its lowest level since October 2008. It was 0.4 percent lower at 11.1372 per dollar by 6:22 p.m. in Johannesburg. Platinum for immediate delivery slipped 0.5 percent to $1,421.38 an ounce.
The temporary loss of output isn’t a major credit risk for Amplats given it has about two months of above-ground stockpiles, Moody’s Investors Service said in an e-mailed note.
The strike may be “credit-positive for Amplats because it will be able to sell its platinum at higher prices that have resulted from the strikes and it benefits from a weaker rand,” it said.
The AMCU has unseated the National Union of Mineworkers as the biggest labor organization at the platinum mines. It has gained in membership and influence since a six-week strike at Lonmin (LMI) in 2012, during which at least 44 people died. At least 70,000 members of the union have downed tools in the country that is home to about 70 percent of global production.
There were no strike-related incidents reported over the weekend or early today, Thulani Ngubane, a spokesman for the South African Police Service in the North West province, said in a text message.
Striking employees chased away workers who wanted to report for duty at two Impala shafts, Sydwell Dokolwana, the NUM’s regional secretary, said in a text message.
Amplats and Impala were granted a court order on Jan. 24 aimed at preventing intimidation by AMCU members of other workers, the companies said today in a statement. The order requires AMCU to ensure its members keep to picketing rules and don’t damage company property, the statement shows.
Mine stoppages inflated the deficit on South Africa’s current account, the broadest measure in the trade of goods and services, to 6.8 percent of gross domestic product in the three months through September, according to the country’s statistics agency.
“The strike is going to worsen” the deficit in the balance of trade, Chamber of Mines Chief Executive Officer Bheki Sibiya said in an interview in Johannesburg. “The call for a minimum wage of 12,500 rand is unaffordable; it’s not the lack of will, it’s the lack of ability.”
The nation’s economy will expand 2.8 percent this year, according to the median estimate of 24 economists surveyed by Bloomberg from Jan. 17 to Jan. 22.
“The mining sector is crucial to the South African economy,” Finance Minister Pravin Gordhan said last week at the World Economic Forum in Davos, Switzerland. “Government is working very hard at mediating some of the differences between employers and labor unions” to end the strikes, he said.
To contact the editor responsible for this story: Vernon Wessels at email@example.com