Police Disperse Crowd of 3,000 at Amplats Amid Strike Talks

South African police fired rubber bullets and water cannon to disperse a 3,000-strong crowd who massed at an Anglo American Platinum Ltd. (AMS) mine in support of a strike that has disrupted the world’s three biggest producers.

Police broke up the crowd at the Khuseleka mine, northwest of Johannesburg, Thulani Ngubane, a spokesman for the South African Police Service in the North West province, said by phone today. Two people were arrested.

The group had “the intention of not letting any mineworker go to work and we tried to resolve it amicably and we had to resort to minimum force,” Ngubane said.

Talks resumed in Pretoria aimed at resolving the dispute between producers and the Association of Mineworkers and Construction Union, which has been on strike over pay since Jan. 23. The union has more than 70,000 members on strike at Anglo American Platinum, Impala Platinum Holdings Ltd. (IMP) and Lonmin Plc (LON), which run the largest mines in a country accounting for about 70 percent of global output of the precious metal.

At least 44 people died, including 34 killed by police in a single day during labor protests at Lonmin’s Marikana operations in August 2012. That unrest stemmed from a wave of strikes that started in platinum and spread to other mines last year.

The AMCU union wants monthly basic pay to be more than doubled to 12,500 rand ($1,119). The walkouts are costing South Africa about $36 million daily, according to the Chamber of Mines.

Marginal Mines

While Anglo American Platinum, also known as Amplats, Impala and Lonmin are losing about 200 million rand of revenue daily, the total impact on the country is double that, according to the chamber. About 40 percent of South Africa’s platinum industry is marginal or unprofitable at current prices, according to the industry group.

“The wage increases that are demanded by AMCU, specifically the 12,500 rand, are unaffordable for the industry and will push more of the industry into loss-making territory, which clearly is not in the interests of anyone,” Roger Baxter, chief operations officer at the chamber, said at the Investing in African Mining Indaba conference in Cape Town.

The country’s Commission for Conciliation, Mediation and Arbitration, a consultant to the talks, made a proposal for the companies and unions to consider, it said in a Feb. 1 statement. The mediated proposition could form the basis of a final settlement, the CCMA said. Negotiations will continue tomorrow, the platinum producers said in an e-mail.

Strike Spreads

“I think it will allow the parties to engage more in an attempt to solve the strike,” AMCU President Joseph Mathunjwa said by phone, referring to the talks. The union will hear from the companies about whether they agree to the proposals, he said.

The National Union of Metalworkers of South Africa, the largest labor group at Anglo American Platinum’s refineries and smelters, joined the strike yesterday, Steve Nhlapo, an organizer for the union, said by phone. Numsa is demanding pay increases of as much as 10 percent for higher-skilled employees and a raise of at least 2,500 rand monthly for the lowest-paid.

“We’re not part of the Pretoria talks, they will have to set up a meeting,” Nhlapo said, referring to Amplats, an Anglo American Plc (AAL) unit.

Impala is sending workers who have been reporting for their shifts on leave in response to the strike, Johan Theron, a company spokesman, said in an e-mail yesterday. Employees attempting to report for duty have been blocked, prompting police intervention, he said.

Currency Impact

“We have police on the ground where people have been arrested when they become involved in acts of violence,” Mineral Resources Minister Susan Shabangu said at a press conference in Cape Town. “We have seen there is more compliance by the unions in making sure that they strike and march peacefully.”

Labor unrest in South Africa has weighed on the rand, which traded 1.7 percent higher against the dollar at 5:34 p.m. in Johannesburg.

“It’s exceedingly difficult dealing with a period of exchange rate volatility,” Trevor Manuel, South Africa’s minister in charge of the National Planning Commission, said in Cape Town yesterday. “We need at least to secure industrial peace to ensure that we can attract and retain investment.”

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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