Jan. 25 (Bloomberg) -- Talks aimed at ending a South African strike that has disrupted the world’s three biggest platinum producers will resume next week as the government seeks to restore stability in a key industry.
“Government is working very hard at mediating some of the differences between employers and labor unions,” Finance Minister Pravin Gordhan said in an interview yesterday at the World Economic Forum in Davos, Switzerland. “The mining sector is crucial to the South African economy.”
Negotiations between Anglo American Platinum Ltd., Impala Platinum Holdings Ltd. and Lonmin Plc and the Association of Mineworkers and Construction Union, mediated by Labor Minister Mildred Oliphant, are due to resume in Johannesburg on Jan. 27.
At least 70,000 AMCU members started their strike with the early shift on Jan. 23. in a walkout that is costing the companies about $14 million a day in lost revenue. South Africa accounts for about 70 percent of global production of the precious metal, which is its biggest single overseas shipment.
Strikes “damage exports, which has implications for our trade account and for perceptions of the mining industry,” Gordhan said.
The AMCU, the biggest representative of workers at the mines, has said it will continue the walkout until its pay demands are met. The union wants wages for the lowest-paid entry-level miners to be more than doubled to 12,500 rand ($1,130) a month. South Africa’s inflation rate was 5.4 percent in December.
“There is a hope that the parties will engage,” AMCU President Joseph Mathunjwa told reporters after initial talks with the companies yesterday. “We are very hopeful that there will be a resolution to this matter.” He earlier said the companies should prepare for “marathon negotiations.”
Police stepped up security on South Africa’s platinum belt as they sought to avoid a repeat of labor unrest that claimed the lives of at least 44 people near Lonmin’s Marikana mine in August 2012.
The platinum strike has undermined the rand, which fell 0.9 percent to 11.0937 against the dollar as of 7:29 p.m. in Johannesburg yesterday. Platinum for immediate delivery was 0.3 percent lower at $1,452.25 an ounce.
About 10 percent of Impala employees reported for duty both yesterday and Jan. 23, spokesman Johan Theron said. He estimated the stoppage will cost the company about 2,800 ounces a day in production of platinum, used in jewelry and catalytic converters that reduce harmful emissions from vehicles.
Amplats is losing about 4,000 ounces of production a day, it said in a statement yesterday. Worker attendance at affected mines is about 10 percent.
Lonmin has said it will lose about 3,100 ounces of platinum a day because of the strike. The 9,900 ounces the companies say they are losing in daily output is valued at about $14 million at yesterday’s spot price.
To contact the reporters on this story: Andre Janse van Vuuren in Johannesburg at firstname.lastname@example.org; Paul Burkhardt in Johannesburg at email@example.com; Kevin Crowley in Johannesburg at firstname.lastname@example.org
To contact the editor responsible for this story: John Viljoen at email@example.com