Impala Platinum Holdings Ltd. failed to reach a pay agreement with its largest union and will start third-party mediation on July 19, seeking to prevent a repeat of a strike that halted its biggest mine for two weeks last year.
The National Union of Mineworkers, South Africa’s biggest labor union, is demanding a 15 percent increase and better housing and transport allowances, Eddie Majadibodu, a NUM negotiator, said today by phone. Impala is offering 7.2 percent, Johannesburg-based company spokesman Bob Gilmour said by phone.
Unions in the country, which produces more than three-quarters of the world’s platinum, are threatening strikes at power utility Eskom Holdings Ltd. and government departments as they seek above-inflation increases for members underpaid during the apartheid regime that ended in 1994. South Africa’s inflation rate slowed to 4.6 percent in May.
“It’s just more of an indication that countrywide we’re seeing more militancy in wage talks,” Rudi van der Merwe, chief investment officer at Standard Private Bank Equity Advisory Services, said by phone from Johannesburg today. “Expectations are for pay increases significantly above inflation.”
Talks have been influenced by state-owned transport utility Transnet Ltd.’s settlement of 11 percent in May to end a strike that disrupted rail and port operations, Van der Merwe said.
Impala fell as much as 2.70 rand, or 1.5 percent, to 177.30 rand in Johannesburg trading, the lowest intraday price in three weeks. It was at 179 rand as of 1:59 p.m. local time, valuing the company at 113.1 billion rand ($14.6 billion). Larger competitor Anglo Platinum Ltd. rose 0.7 percent to 714.66 rand.
Workers stopped production at Impala’s Rustenburg operations, the world’s biggest platinum mine, for about two weeks last August and September over wages. Impala raised pay by 10 percent to end the strike after it turned violent. Piet Matosa, NUM’s deputy president, lost an eye after he was attacked by striking workers.
That walkout and an accident were expected to cut production by about 100,000 ounces and raise costs in the year to June 30, 2010, Impala estimated in November. The company produced 1.7 million ounces of platinum and 3.4 million ounces of platinum group metals a year earlier, according to its website.