Amplats, Impala, Lonmin May Seek to Have Pay Strike Made Illegal

The world’s three biggest platinum companies may seek to have a strike by the largest union at their operations in South Africa declared “illegal,” Anglo American Platinum Ltd. (AMS) said as the stoppage enters a fifth week.

“It’s something we’re considering,” Chief Executive Officer Chris Griffith told reporters in Johannesburg today. The walkout by more than 70,000 workers is protected under South African labor law, which means the employees can’t be fired.

The employees, who are members of the Association of Mineworkers and Construction Union, have been on strike since Jan. 23, demanding that monthly wages for the lowest-paid underground laborers be more than doubled to 12,500 rand ($1,142). The AMCU rejected a pay-increase offer of as much as 9 percent, more than the inflation rate of 5.8 percent in South Africa, the nation that accounts for more than 70 percent of platinum output.

“This is as far as we can go before we are being irresponsible for the actions we take,” Lonmin Plc (LMI) CEO Ben Magara said at the same briefing. While the offer remains on the table, “there may come a time when this is no longer affordable to us,” he said.

Anglo American Platinum together with Lonmin and Impala Platinum Holdings Ltd. (IMP), have lost 4.4 billion rand of revenue because of the strike, while wages forfeited total 1.9 billion rand, the companies said in a statement.

The wage proposal “pushes the boundary of what is affordable and sustainable as far as we possibly can,” Griffith said. “We do not contemplate anything above this quantum.”

Amplats, as the world’s largest producer is known, is suing the AMCU for 591 million rand, claiming compensation for damage to property, increased security costs and production losses caused by non-striking employees being prevented from going to work, company spokeswoman Mpumi Sithole said on Feb. 14.

The companies “have reason to take umbrage” over the actions of striking workers, which have been unlawful, Griffith said.

To contact the reporter on this story: Andre Janse van Vuuren in Johannesburg at ajansevanvuu@bloomberg.net

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

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