It hasn’t all been doom and gloom for South Africa’s platinum sector, as demonstrated by Royal Bafokeng Platinum (RBPlat) last week. The company showed what’s possible if you can safely navigate labour relations.
Assisted handsomely by the weaker rand against the dollar year on year, RBPlat turned in a 33% increase in share earnings for the six months ended 30 June. It is now on course for higherthan-forecast, full-year earnings provided the rand doesn’t strengthen too heavily in the second half of the year.
This comes at a time when the rest of the platinum sector – bar a few other exceptions such as Aquarius Platinum – has seen cash f lows shredded by industrial action. Lonmin was reduced to a net cash neutral position while Northam Platinum had the proceeds of a R600m rights offer wiped out in a strike at its Zondereinde mine that ended in January.
“The results ref lect the benefits of having a stable workforce,” said Martin Prinsloo, CFO of RBPlat, which has Anglo American Platinum (Amplats) and Royal Bafokeng Resources as its main shareholders.
There is no single reason for stable labour relations but a R2.8bn housing and amenities project at the firm’s Bafokeng Rasimone Platinum Mine Joint Venture (BRPM), announced in June, is certainly a contributing factor.
A month later, RBPlat had a wage deal which guaranteed a 9.1% cost-tocompany increase over three years – lower than that achieved by RBPlat’s peers Amplats, Lonmin and Impala Platinum – but which also links wages to productivity. A further two years can be added to the wage agreement, but it commits RBPlat to reassessing whether the pay is fair in line with inf lation and
RBPlat avoided the five-monthlong strike in the platinum belt