Amcu sticks to its R12 500 wage demand

THE demand for a R12 500 basic salary for the lowest-paid mineworkers in the platinum sector was first tabled in 2012 by the Association of Mineworkers and Construction Union — and it is being put on the table again as the union enters its second round of wage talks in the platinum sector.

In late 2011, the platinum price began sliding, and by 2012 — the year of the Marikana massacre — it was at about $1 400 an ounce.

And it just kept dropping, to as low as $818 an ounce in January this year. Now, it stands at $1 083.

To add to the woes of platinum mining companies, R24billion in revenue was lost in a five-month wage strike in 2014.

To cope with this change in fortune, platinum companies have closed shafts, cut jobs and raised capital to keep going. And some, like Anglo Platinum, have sold or are selling assets.

Despite the problems in the industry, Amcu president Joseph Mathunjwa said this week: “We are still sticking to R12 500 because they haven’t even achieved that R12 500 to date.

“At the rate at which inflation is running, we need to push every worker to R12 500.”

At the moment, the lowestpaid mineworkers take home between R6 000 and R8 000 a month.

Mathunjwa admitted that Lonmin was still struggling.

“The state of the company . . . is challenging, but it is kind of stable in the last results that they’ve shown.” He said the company had not shown a profit, but was able to pay its debts.

Lonmin spokeswoman Sue Vey said of the wage negotiations: “We expect to engage in discussions with our majority unions shortly, where we will discuss these demands. We remain committed to negotiating in good faith while remaining aware of the economic realities facing the PGM [platinum group metals] sector and mining industry.”

Impala Platinum, the secondlargest producer, which last year went to shareholders to raise funds to keep the business going, has seen its share price fall 77% since 2011.

The company’s spokesman, Johan Theron, said Implats was not surprised by Amcu’s demand, because it knew the union’s strategic principle was to ask for R12 500.

But, he added: “Getting there [to R12 500] in a sustainable manner will still be a challenge, and to a large degree will depend on reaching sensible compromises that will incentivise labour productivity and the required profitability to get there over time.”

Anglo American Platinum’s share price has dropped 42% since the beginning of 2011.

Amplats was not available to comment.

Mathunjwa said, however, that because of all the retrenchments in the platinum sector he believed the companies were “geared for a better wage increase”.

Lonmin has cut about 6 000 jobs in the past two years, Amplats 2000 and Implats about 1 600.

“I’m not suggesting that we have to interchange the two and say if you retrench then those who are left will get a high salary,” Mathunjwa said.

Mamokgethi Molopyane, a mining and labour analyst at Creative Voodoo Consulting, doubts that Amcu will receive

Platinum companies have closed shafts, cut jobs, raised capital

what it is asking for. “They can get other aspects of the wage demands, like medical aid benefits.” If the R12 500 minimum wage was accepted, “it changes mining completely at a labour level”, said Molopyane.

Along with the R12 500, Amcu is demanding that skilled workers get a 15% increase, and that each mineworker receives R2 000 a month for transport, R100 a day for meals and a living-out wage of R3 000.

Izak van Niekerk, an analyst at Mergence Investment Managers, said the mining companies would try to only pay an inflation-linked wage increase of 6%.

Since the first time Amcu had demanded R12 500 “at least the difference is much smaller than it was before, but they would be more likely to get inflation”, he said.

Amcu wants a one-year wage agreement, but is open to extending it depending on what is agreed on during the negotiations. The previous three-year wage agreement expired at the end of last month.

A new agreement will be backdated to July 1. Amcu plans to start negotiating with Implats on Tuesday, Lonmin on Wednesday and Amplats on Thursday.