Miners’ union backs plan to end pay strike

JOHANNESBURG — The union whose strike has paralyzed production at the world’s three largest platinum companies has agreed to the employers’ plan that may end a more than four- month pay strike.

“In principle they agree,” Association of Mineworkers and Construction Union president Joseph Mathunjwa said Thursday at an Impala Platinum Holdings meeting with miners.

While workers’ acceptance of the proposal is “a breakthrough,” they have conditions relating to issues that include back pay, the length of the agreement, reinstatement of jobs and living- out allowances, he said. The leader also met with employees at Anglo American Platinum and Lonmin.

Undertakings have been reached “in principle” with the union’s leaders covering wages and conditions of employment, the producers said in a joint statement. Platinum and palladium prices dropped on the news.

More than 70,000 members of the union have been on strike over pay since Jan. 23 in South Africa, which accounts for about 70 per cent of global mined platinum production. The companies say workers have missed out on about $ 1 billion Cdn in wages and that they have lost $ 2.24 billion in revenue.

The process is a very sensitive one and we will ensure that we act in good faith.

CHARMANE RUSSELL SPOKESWOMAN, PLATINUM PRODUCERS

Mineral Resources Minister Ngoako Ramatlhodi said Monday he was withdrawing from efforts to resolve the walkout.

“It was getting to the point where there was very limited visibility after the minister left the process, so this is coming as a surprise,” Tyler Broda, a London- based mining analyst at Nomura International, said by phone.

“That’s what the equities and the metal prices are showing at the moment.”

Impala proposed to improve the basic monthly wage of its lowest- paid miners by $ 101 Cdn in the first and second years, AMCU treasurer Jimmy Gama told workers as he read from a letter by the company dated Wednesday. That compares with a previous plan of $ 59 in year one and $ 69 in year two.

It also proposed an increase of $ 96 a month in years three to five, compared with $ 76 in year three, $ 85 in year four, and $ 91 in year five, he said.

Living- out allowances will remain at constant 2013 levels, Impala said.

“The process is a very sensitive one and we will ensure that we act in good faith,” Charmane Russell, a spokeswoman for the three producers, said in an email.

Impala shares were little changed at $ 11.48 Cdn by the close in Johannesburg. Anglo American Platinum declined 1.7 per cent to $ 27.47, while Lonmin surged 8.9 per cent, the most since Jan. 31, 2013, to $ 4.73 in London. Platinum for immediate delivery fell three per cent to $ 1,437.35 US an ounce by late afternoon in London and palladium sank 4.7 per cent to $ 820.50 an ounce.

“The only agreement we have is that the union will go back to members and refresh its mandate,” Impala spokesman Johan Theron said by phone.

The companies and the AMCU will hold further talks should union members respond positively, Theron said.

The AMCU will hold another meeting with members once it has met with the producers, Mathunjwa said.