Platinum Talks Set for Key Day After Minister’s Ultimatum

The world’s three largest platinum producers and the dominant union at their South African operations are nearing an end to negotiations led by the government to resolve the country’s longest mining strike.

Minister of Mineral Resources Ngoako Ramatlhodi set up a task team last month within days of starting the job. “I’m convinced that we have done enough work,” Ramatlhodi said of government efforts at a June 7 press conference. He said today would be the last government-led meeting to resolve the impasse.

The strike by more than 70,000 Association of Mineworkers and Construction Union members at mines of Anglo American Platinum Ltd., Impala Platinum Holdings Ltd. and Lonmin Plc started Jan. 23. It cut mining’s contribution to the economy by the most in 47 years in the first quarter, prompting the first contraction in gross domestic product since a 2009 recession.

“Companies will be represented at a very senior level, including CEOs” at today’s meeting, Charmane Russell, a spokeswoman for the producers, said in an e-mail. AMCU Treasurer Jimmy Gama said in a text message the parties were still meeting, without giving any details.

Repeated previous sets of talks have failed to engineer a breakthrough in the dispute. Negotiations between the sides crumbled under meditation by the Commission for Conciliation, Mediation and Arbitration.

Later bilateral meetings resulted in the companies ending discussions and putting a pay offer directly to employees, a move that the union sought to block in unsuccessful legal action. Labor Court Judge Hilary Rabkin-Naicker also took the unusual step of mediating company-union talks.

Wage Demands

Ramatlhodi has pointed to some progress toward an agreement during the latest government-led talks. “There has been movement from all sides,” he said last week.

Union members are on strike over a demand for basic monthly pay excluding benefits for entry-level underground employees to be more than doubled to 12,500 rand ($1,168) by 2017. The producers have said increases of that order would cost too much.

The stoppage by workers in the country with the biggest reserves of the metal has cost the producers 21.7 billion rand in lost revenue and miners 9.6 billion rand in earnings, the companies estimate.

“If we fail to get a solution, what is likely to happen is that the parties can elect their own independent arbitrator,” or return to the labor court for mediation, Ramatlhodi said June 7. “There are possibilities that we might advise them to go there.”

The strike has idled 60 percent of South African platinum-group metal production, affecting 45 percent of global supply, the producers said in a fact sheet on the stoppage updated today. By June 13, the strike will have cost the industry more than 30 percent of annual production over 116 working days, the companies said.

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