Platinum Strike Batters South Africa as Talks Extended

The three biggest platinum producers held more talks with a South African labor court judge mediating in a dispute with the main union as the effect of a four-month strike dragged the economy to its first contraction since 2009.

“The producers met with the judge yesterday and expect to meet with her again later today,” Charmane Russell, a spokeswoman for the three producers at Russell & Associates, said by e-mail.

The latest phase of negotiations between Anglo American Platinum Ltd., or Amplats, Impala Platinum Holdings Ltd., Lonmin Plc and the Association of Mineworkers and Construction Union began last week. Labor Court Judge Hilary Rabkin-Naicker is seeking to guide the talks toward an agreement that will end a strike that has paralyzed mines since Jan. 23.

South African mining production plunged by an annualized 24.7 percent in the three months through March, the biggest quarterly drop since the second quarter of 1967, the statistics office said today in Pretoria, the capital. First-quarter gross domestic product fell 0.6 percent from the final three months of 2013.

The strike by more than 70,000 miners cost the companies 471,720 ounces of production in the first quarter and 19.8 billion rand ($1.9 billion) to date in lost revenue. Workers have given up 8.8 billion rand in wages, the companies say.

‘Extraordinary Step’

Ngoako Ramatlhodi, the minister of mineral resources, wants to “find a way of facilitating an agreement” to end the strike, he told reporters yesterday after he was sworn into office. “The current system of labor relations has collapsed,” he said.

Rabkin-Naicker, the labor court judge, “took quite an extraordinary step” in offering to mediate, Johan Olivier, a Johannesburg-based partner at law firm Webber Wentzel, said in a phone interview. While the move was supported by the companies and the union, she won’t issue rulings in the process, said Olivier. “The judge can’t impose anything on the parties.”

AMCU President Joseph Mathunjwa and Treasurer Jimmy Gama didn’t answer their phones today when called for comment.

Their union wants basic monthly pay, without benefits, to more than double to 12,500 rand in four years for entry-level underground employees. The producers say they can’t afford the demands.

Impala has extended leave for workers until June 2 and will review the situation again later this week, Johan Theron, a company spokesman, said in an e-mail. Impala has shut its South African mines. Amplats is running some operations in the country, with daily attendance of at least 20 percent, while Lonmin has less than 20 percent of workers reporting for duty, according to a website of the producers updated today.