Gordhan Says Compromise Needed to End S. Africa Mine Feud
South African Finance Minister Pravin Gordhan said companies, the government and labor unions need to end disputes that are halting mines and have pushed the rand to a four-year low against the dollar.
“This is going to require quite spectacular leadership from all sides, not just from the labor unions,” Gordhan said on Johannesburg-based state-owned SAFM radio today, after the world’s biggest platinum producer agreed to job talks and rubber bullets were fired at striking chrome miners. “It requires a shift, it requires bold leadership, it requires a give and take by everyone concerned, not in the interests of industry only but also in the interests of the country.”
Companies in the country with the largest known platinum reserves are struggling for profit as metal prices decline and costs outpace inflation, which was 5.9 percent last month. Union rivalry has led to the deaths of workers, disrupted mines and helped make the rand the worst performer among emerging-market currencies against the dollar this year. In the gold and coal industries, a union this week asked for wage increases of as much as 61 percent for entry-level miners.
Anglo American Platinum Ltd. (AMS) will resume talks with unions and the government through a state mediator over job cuts on May 24 after agreeing on steps to preserve employment, the minerals ministry said yesterday. On May 10, the company said it planned to eliminate about 6,000 jobs at mines in the nation, less than half the number proposed in January, as it seeks to idle three shafts and reduce annual platinum output by 350,000 ounces.
The assassination of an Association of Mineworkers and Construction Union official on May 11 near the 13-shaft Marikana operation of Lonmin Plc (LMI), the third-largest platinum producer, and a dispute over union recognition sparked fears of renewed labor unrest in the contintent’s largest economy when workers refused to go underground for two days last week.
Lonmin today said no agreement has been reached with the AMCU, its biggest union, on forming a new recognition pact, which would give the organization more rights. The AMCU wants Lonmin to close the office of the National Union of Mineworkers, which previously spoke for the majority of employees and now has the support of 30 percent, the company said.
The AMCU, which represents 70 percent of lower-level workers at Lonmin, wants a threshold for recognition of 30 percent, while the company is seeking 10 percent. Lonmin on May 9 said the union referred talks on the agreement to South Africa’s Commission for Conciliation, Mediation and Arbitration.
“The senior commissioners of the CCMA issued a certificate of non-resolution” and will meet again tomorrow, Lonmin said in a statement. “If no agreement can be reached at that meeting, the process will then move to formal arbitration.”
Seven people, including two shot by rubber bullets, were injured in clashes between workers and security personnel over annual performance-related payments at Lanxess AG (LXS)’s chrome unit near Rustenburg in North West province yesterday.
The Leverkusen, Germany-based company today said it presented “a fair offer” to the National Union of Mineworkers’ representatives, who are speaking on behalf of about 470 employees who started an illegal strike on May 16. The union rejected the offer and the stoppage continues, spokeswoman Sibonile Dube said by phone.
The rand weakened for a 10th day against the dollar, losing 0.1 percent to 9.5518 by 6:22 p.m. in Johannesburg, extending its drop this year to 11 percent, the most among emerging-market currencies, according to data compiled by Bloomberg.
This week, the NUM asked the biggest gold and coal producers to increase wages by as much as 61 percent.
“I expected demands to be steep but these demands are incredibly steep,” Elize Strydom, the chief negotiator for the Chamber of Mines, the body through which wage talks take place, told Johannesburg-based Business Day newspaper.
Amplats, as Anglo American Plc (AAL)’s platinum unit is known, in January put its plans to fire as many as 14,000 workers on hold after objections from the government and labor unions, including a threat by Susan Shabangu, the mines minister, to revoke some of its licenses. Amplats had intended to cut 7 percent of global output to help return to profitability.
“Parties have agreed on measures and mitigation plans that will preserve jobs,” the Department of Mineral Resources said in an e-mailed statement yesterday. Talks with the CCMA will start later this week, it said.
Amplats shares closed 3.1 percent higher at 297.51 rand in Johannesburg, paring the drop this year to 33 percent. Lonmin was unchanged at 270.40 pence in London. Platinum rose 0.6 percent to $1,472.40 an ounce, paring its drop this year to 4.4 percent.
Platinum producers are seeking to centralize wage talks through the Chamber of Mines, as is done in the gold and coal industries. The AMCU, now the biggest union in platinum, doesn’t want to participate in such combined negotiations.
“We do want to appeal to citizens not to despair and throw hands into the air on the basis on challenges we are facing,” Labor Minister Mildred Oliphant told lawmakers in Cape Town today. “Talks are continuing about the character of the new centralized bargaining arrangement in the platinum sector.”
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