Jan. 24 (Bloomberg) -- A strike at South African platinum mines paralyzed the world’s three biggest producers of the metal for a second day as talks to resolve the dispute over pay broke up until Jan. 27.
Negotiations between Anglo American Platinum Ltd., Impala Platinum Holdings Ltd. and Lonmin Plc and the Association of Mineworkers and Construction Union will resume for three days at the start of next week, said Musa Zondi, a spokesman for Labor Minister Mildred Oliphant, who is mediating the discussions. The price of platinum pared its declines as prospects of a quick end to the walkout faded.
“There is a hope that the parties will engage,” AMCU President Joseph Mathunjwa told reporters after the meeting. “We are very hopeful that there will be a resolution to this matter.” He earlier said the companies should prepare for “marathon negotiations.”
At least 70,000 employees began their stayaway yesterday in the country that is home to 70 percent of global production. The mining companies estimate the strike will cost about $13 million a day in lost revenue. 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 workers near Lonmin’s Marikana mine in August 2012.
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 ($1,134) a month. South Africa’s inflation rate was 5.4 percent in December.
South Africa’s rand declined 1.4 percent to 10.9884 per dollar at 2:30 p.m. in Johannesburg. Platinum for immediate delivery was 0.3 percent lower at $1,452.25 an ounce, paring an earlier decline of as much as 0.9 percent.
Amplats, as Anglo American Platinum is known, fell 0.3 percent to 440.62 rand. Impala climbed 0.3 percent to 127.89 rand while Lonmin lost 0.9 percent to 317.90 rand.
Hundreds of striking employees wielding fighting sticks and machetes and singing protest songs marched yesterday at Impala’s mines in Rustenburg, 116 kilometers (72 miles) northwest of Johannesburg. Members of the National Union of Mineworkers, displaced by the AMCU as the most powerful union at platinum mines, took refuge at NUM offices after being prevented from reporting for duty.
“We again saw large-scale blockading of entrances” at the start of the strike’s second day, Johan Theron, a spokesman for Johannesburg-based Impala, said today by phone. The company canceled its night shift for the duration of the walkout to avoid non-striking employees from commuting in darkness.
About 10 percent of employees reported for duty both today and yesterday at the company, said Theron. 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 today. Worker attendance at affected mines is about 10 percent and the situation is calm. The company said it condemned incidents of violence and intimidation taking place around Rustenburg.
Some members of the UASA union were intimidated at Impala and Amplats, Franz Stehring, the organization’s head of mining, said by phone.
“We won’t hesitate to withdraw our members from duty if the mines can’t guarantee their safety,” he said. UASA mainly represents higher-skilled workers at the operations.
Strikers carrying weapons will face “the might of the law,” Police Minister Nathi Mthethwa told reporters in Pretoria.
“We are concerned about what is happening on the platinum belt,” Mthethwa said. “I was going around those mines before coming to this press conference. We have seen some people carrying weapons. It’s a problem.”
Yesterday, about 50 people barricaded a road close to Amplats’ Khuseleka shaft with burning tires, stones and rubble, the police said in a statement. This morning, a furniture shop at Wonderkop in the Marikana area, near where police killed 34 people in a single day in August 2012, was burned to the ground and a case of arson is being investigated, police said.
No serious incidents have occurred around Lonmin mines today where 319 employees, or 1.1 percent of staff, reported for duty, spokeswoman Sue Vey said. The company will lose about 3,100 ounces of platinum a day because of the strike. Amplats, which hasn’t provided a figure, lost about 3,100 ounces daily during a similar walkout in October. The 9,000 ounces of lost platinum between the three companies equates to about $13.1 million of revenue based on 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