Amplats Sues Platinum-Strike Union as Talks Stumble

Anglo American Platinum (AMS) Ltd. is suing a South African union that is on strike at the world’s largest producers of the metal and said pressure is growing on the labor group over its three-week walkout.

More than 70,000 Association of Mineworkers and Construction Union members have been on strike since Jan. 23 at Anglo American Platinum, Impala Platinum (IMP) Holdings Ltd. and Lonmin Plc. (LMI) They are demanding that monthly wages for the lowest-paid underground workers be more than doubled.

Amplats, as the Johannesburg-based company is known, is suing the AMCU for 591 million rand ($54 million), spokeswoman Mpumi Sithole said today in an e-mail. The company is claiming for damage to property, increased security costs and production losses caused by non-striking employees being prevented from going to work, Sithole said.

Combined lost revenue at the three companies has reached about $315 million, with strikers giving up $140 million in pay, a spokesman for the producers said in a statement today. South Africa accounts for about 70 percent of global production of the metal used in jewelry and catalytic converters for vehicles.

Amplats is producing 5,000 ounces a day and has lost more than 60,000 ounces valued at 1.5 billion rand, Chief Executive Officer Chris Griffith said at a presentation during parent Anglo American Plc (AAL)’s results in London today. “We are still selling stock. We sold just over 200,000 ounces in January so we continue our sales because of the stock we built up.”

Prolonged Strike

Impala Platinum is preparing for the strike to last until May as talks to resolve the deadlock make little progress, Johan Theron, a spokesman for the Johannesburg-based company, said by phone.

“It was always important to see if the parties could make some headway during the first three weeks” of the walkout, Theron said. The AMCU “hasn’t moved a centimeter.”

The AMCU may be losing members as workers face a second month without pay, Chris Griffith at Amplats said. “The pressure against AMCU is rising from all different scenarios.”

Talks scheduled for today between the AMCU and the Commission for Conciliation, Mediation and Arbitration were delayed to Feb. 17, the mediator said in a statement. Union negotiators were preparing for the funeral of an AMCU official killed during a protest at Amplats’s Union mine on Feb. 7, union leader Joseph Mathunjwa said by phone.

Mathunjwa’s union has displaced the National Union of Mineworkers as the dominant labor force on South Africa’s platinum belt, winning support partly through its aggressive wage demands. It wants pay for entry-level workers to rise to 12,500 rand and has rejected an offer for increases of as much as 9 percent made in mediated talks.

Job Losses

The NUM is critical of the AMCU’s tactics, arguing they will lead to job cuts.

“When you get stuck in saying just 12,500, nothing less, nothing more, I don’t regard that as negotiations or as the way to find a settlement,” Senzeni Zokwana, president of the NUM, said in a phone interview yesterday. Zokwana is the second president of the union, founded in 1982.

The only way the companies can recoup the money lost during the strike will be through cutting jobs, he said. “Since 1987, whenever we take a longer strike, the outcome of the longer strike will be the application of section 189, which will result in job losses.” The legislation covers the firing of workers because of reduced operational needs.

The death of the AMCU organizer a week ago during protests at Amplats followed other strike violence. Police fired rubber bullets and water cannon to disperse a crowd of 3,000 at Amplats’ Khuseleka mine on Feb. 4.

Violent Protests

Impala sent non-striking workers on paid leave after employees were blocked from reporting for duty, Theron said Feb. 3.

“We’re concerned, because if nothing is being done at Anglo Platinum, then the same intimidation can be used as well at Lonmin, because if you’re not deterred from doing things that are unconstitutional, then law can’t prevail,” the NUM’s Zokwana said.

At least 44 people, including 34 killed by police in a single day, died during weeks of protests at Lonmin’s Marikana mine in August 2012. South African President Jacob Zuma yesterday called for an end to violent mining strikes and street protests.

“In no way can we have conflict that destroys the economy,” Zuma said in his state-of-the-nation speech to Parliament in Cape Town. “When protests threaten lives and property and destroy valuable infrastructure intended to serve the community, they undermine the very democracy that upholds the right to protest.”

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: John Viljoen at jviljoen@bloomberg.net

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