March 6 (Bloomberg) -- Striking platinum miners are marching on South African government offices in Pretoria after talks to end a dispute over pay collapsed without any prospect that a deadlock at the biggest producers will be resolved soon.
The Association of Mineworkers and Construction Union, which has been on strike for six weeks, has said it will gather 40,000 workers and supporters for the protest ending at the Union Buildings. It was due to start at 9:30 a.m. local time.
The union and Anglo Platinum Ltd., Impala Platinum Holdings Ltd. and Lonmin Plc, which together account for more than two-thirds of all the platinum mined globally, remain far apart in negotiations over pay demands, the state mediator said yesterday.
More than 70,000 members of the union walked off the job in support of wage increases that include more than doubling pay for entry-level miners. The producers say they have lost a combined $660 million in revenue and that employees have forfeited $290 million since the strike started on Jan. 23.
Lonmin, the third-largest producer, won’t meet its full-year sales target of at least 750,000 ounces of the precious metal because of the strike, it said yesterday. The company said it can’t estimate the increase in costs caused by the walkout.
The price of platinum, used for jewelry and catalytic converters in vehicles to reduce harmful emissions, has climbed 7.6 percent this year. Platinum for immediate delivery fell 0.2 percent to $1,475 an ounce by 10:28 a.m. in Johannesburg.
The mediator, the Commission for Conciliation, Mediation and Arbitration, said yesterday it “has decided to adjourn the process to give all parties an opportunity to reflect on their respective positions.”
The companies have offered to raise entry-level wages, which range from 5,000 rand ($470) to 5,700 rand a month, to as much as 7,200 rand by 2015. The AMCU initially sought immediate increases in basic wages to as much as 12,500 rand. On March 4, the union said it would give the companies three years to meet the target. The producers said the demand remains unaffordable.
Amplats, as the biggest producer is known, is “discouraged by the turn of events,” Chief Executive Officer Chris Griffith said in a statement yesterday. “We are hopeful though that AMCU will come to recognize and appreciate the realities of the company’s position and will work toward a solution that will benefit its members.”
Impala CEO Terence Goodlace said the companies “remain committed to finding an affordable and sustainable solution” to the impasse over pay.
The three producers’ refusal to budge further on pay is the right thing to do, even as they incur production losses, Ben Davis, an analyst at Liberum Capital Ltd., said yesterday by phone from London. “It is exactly what shareholders would expect.”
Mining companies are already the highest payers among labor-intensive industries in South Africa and it’s “imperative that the economic realities are taken into account,” Amplats, Impala and Lonmin said in a joint statement yesterday.
The three producers gained in Johannesburg trading today. Amplats was 0.2 percent higher, Lonmin advanced 2.2 percent, and Impala rose 0.3 percent by 10:30 a.m.
A Johannesburg court is due to rule by the end of the week on whether the AMCU and its leaders are in contempt for allegedly ignoring an order handed down in January that the union prevent violence during a strike.
The application was brought by Amplats after an AMCU official was killed in clashes with police and two others were arrested for the attempted murder of a company employee last month.
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