June 10 (Bloomberg) -- The world’s largest platinum producers will consider steps to end a 20-week pay strike after government-led talks with the union leading the walkout failed.
Negotiations overseen by Minister of Mineral Resources Ngoako Ramatlhodi with the Association of Mineworkers and Construction Union “have been dissolved without an outcome,” Anglo American Platinum Ltd., Impala Platinum Holdings Ltd. and Lonmin Plc said in a joint statement yesterday.
“We’ll have to analyze our options” on how next to respond to the strike, Johan Theron, a spokesman for second-biggest producer Impala, said by phone. “That won’t take long - - probably a day or two.”
The AMCU has led the strike of more than 70,000 mineworkers since Jan. 23, asking for wages of the lowest paid underground employees to be more than doubled to 12,500 rand ($1,175) a month by 2017. The companies have said that’s unaffordable and offered increases of as much as 10 percent. The talks that ended yesterday were to be the last led by the government, according to Ramatlhodi.
“Failure on the negotiations front will revive debate of other potential routes to a resolution,” Anne Fruhauf, southern Africa analyst at New York-based risk adviser Teneo Intelligence, said in an e-mailed note to clients. Possible steps include “legal action to declare the strike dysfunctional; voluntary arbitration; a return to labor court mediation; and efforts to break the strike,” she said.
AMCU leader Joseph Mathunjwa said yesterday the union has made “many concessions” to try end the impasse. In the latest talks, the companies “offered nothing different to what was offered before,” he told reporters in Pretoria. The AMCU will meet with members starting today to get views on how to respond to the outcome of talks, he said.
Repeated attempts have failed to engineer a breakthrough in the dispute that has idled 60 percent of output in the largest platinum-producing country. Negotiations between the sides earlier crumbled under meditation by the Commission for Conciliation, Mediation and Arbitration.
Later bilateral meetings ended in the companies breaking off discussions and putting a pay offer directly to employees, encouraging them to break the strike, a move that the union sought to block in unsuccessful legal action.
“Such a scenario, even if it did succeed, would imply a slow trickle back to work, rather than a clear end to the strike,” Fruhauf said. “But the precarious security situation on the ground remains an obstacle to such an outcome.”
A labor court judge, Hilary Rabkin-Naicker, also took the unusual step of mediating company-union talks. The process started by Rabkin-Naicker remains in place and could still lead to a settlement in future, Mathunjwa said.
“We believe that if this door of the minister is closed today, it does not mean that any other door or avenue that can’t open for us in order to reach an agreement,” he said yesterday.
Ramatlhodi will comment on the talks at a briefing in Pretoria today, his ministry said in an e-mailed statement.
Platinum was little changed at $1,451.90 an ounce by 7:46 a.m. in London.
The companies said in a statement that they have forfeited earnings of 22 billion rand and employees have lost about 9.6 billion rand in wages since the strike began.
“We are going to have a very difficult time ahead regardless of the strike,” because of reduced profit margins and the costs involved in restarting production, Happy Nkhoma, a spokesman for Lonmin, said in an interview on Johannesburg-based SAFM. “It’s very likely that jobs are going to be at risk.”
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