Platinum Mines Mull Strike Union’s Plan as Talks Advance

Platinum producers crippled by a four-month strike in South Africa asked for time to consider a pay proposal from the union before government-brokered talks resume today.

Minister of Mineral Resources Ngoako Ramatlhodi met with chief executive officers from platinum producers in Pretoria yesterday, “during which a proposal from the Association of Mineworkers and Construction Union was presented,” the department said in a statement.

The strike by more than 70,000 AMCU members at Anglo American Platinum Ltd. (AMS), Impala Platinum Holdings Ltd. (IMP) and Lonmin Plc (LMI), the world’s three leading producers, has disrupted their mines since Jan. 23. The minister is driving an effort to resolve the stoppage to limit further harm to Africa’s second-largest economy.

Ramatlhodi “is taking the matters on the table very seriously,” AMCU President Joseph Mathunjwa said earlier by phone. “At any time they could call us,” he said yesterday after addressing members at a stadium near Lonmin’s Marikana operations, about 120 kilometers (75 miles) northwest of Johannesburg.

“I am encouraged by the progress on this matter, and the cooperation of all parties involved,” Ramatlhodi said after meeting with the union June 3. Lonmin, Anglo Platinum and Impala requested time to consider the AMCU proposal, and the meeting will resume today, the department said in its statement.

Economic Blow

South Africa’s economy contracted in the first quarter for the first time since a 2009 recession as the walkout caused mining production to plunge by the most in 47 years. The companies say the strike has cost them 21 billion rand ($2 billion) in lost revenue, while workers have forgone more than 9 billion rand in wages.

A wage deal discussed in the negotiations last week would benefit lowest-paid workers the most, according to two people familiar with the talks. Those with the lowest salaries would receive an increase of 800 rand a month every year for five years, said the people, who asked not to be identified because the information isn’t public.

The strike “will likely end within 10 days,” Mark Rosenberg, Africa director at Eurasia Group in New York, said in a note to clients yesterday. “A more credible intervention” by Ramatlhodi, a higher first-year wage increase for lower-skilled workers and a recent court victory for producers “are driving an end” to the walkout, he wrote.

Unions’s Demand

A South African labor court this week threw out an application by the AMCU to bar the companies from communicating directly with workers about their latest pay offer.

The union is on strike over its demand for basic monthly pay excluding benefits for entry-level underground employees to be more than doubled to 12,500 rand by 2017. South African inflation was 6.1 percent in April. The last offer made public by producers amounted to increases of as much as 10 percent a year.

Mathunjwa said the purpose of addressing members who packed a stadium at Lonmin’s operations yesterday was to convey a May 28 labor court order declaring that picketing rules must be followed. The union’s wage demand remains unchanged, he said.

To contact the reporters on this story: Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net; Andre Janse van Vuuren in Johannesburg at ajansevanvuu@bloomberg.net

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

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