Their blood was not shed for nothing

HE WORLD’s largest platinum producers are bracing for the most severe labour turmoil since 44 people died during the strike at Lonmin’s Marikana mine in August 2012.

About 70 000 members of the Association of Mineworkers and Construction Union (Amcu) plan to walk out over pay on Thursday at mines in the platinum belt run by Anglo American Platinum (Amplats), Impala Platinum and Lonmin.

The area accounts for about 70 percent of global output of the precious metal, whose price advanced to the highest level in more than two months yesterday amid concern that a strike will hobble supplies.

The deadly clash 17 months ago at Marikana came after workers declared: “Enough is enough,” Amcu president Joseph Mathunjwa said last week as he addressed thousands of members.

“We also want the wealth, we want to support and raise our children.”

Speaking at the Wonderkop stadium near where police killed 34 Marikana workers on August 16, 2012, Mathunjwa said: “We are here reminding the employer that their blood was not shed for nothing.”

Producers have been preparing for months for a strike, building up weeks of supplies of the metal to ship to customers if their shafts are halted. While Amcu has spent time renewing a mandate from members before their end-of-year break for a paralysing strike, the companies have said they are open to last-minute talks to try and avert a walkout.

Thousands of Amcu members at Amplats voted on Sunday in a show of hands at a mass meeting to go on strike. The union was set to serve strike notices at Amplats, the world’s biggest producer,

TImpala and Lonmin yesterday. Amcu is also calling its members at gold mines out on strike this week over pay.

Amcu emerged as an alternative force among South African mineworkers during a strike at Impala in early 2012, growing to displace the National Union of Mineworkers (NUM) as the largest among platinum employees. Staging a walkout at mines now gives the union an opportunity to assert its authority as it seeks to fend off competition for numbers from the rival NUM and the National Union of Metalworkers of South Africa (Numsa).

“Amcu needs to take bold action to consolidate its power in the platinum belt,” Mark Rosenberg, an Africa analyst at New York-based Eurasia Group, said. “As we anticipated, the timing was not right before the holidays, but now it is do-or-die time for union leadership, particularly with the prospect of further competition for members from Numsa.”

Amcu is demanding that the basic monthly pay for some workers be more than doubled to R12 500. The lowest-paid

Platinum firms brace for strikes, writes Paul Burkhardt and Andre Janse van Vuuren

underground workers currently get about R5 500, excluding some benefits.

Amplats, where Amcu represents 60 percent of workers, Impala and Lonmin have made wage-increase offers of as much as 8.5 percent of basic pay, 3.2 percentage points more than the inflation rate of 5.3 percent. All three companies have in the past 15 months either turned to investors for funds, set plans to shut mines or cut output. They were disrupted by strikes that lasted six weeks or longer in 2012, collectively losing in excess of 480 000 ounces of production.

“All of them are in a very difficult position cost wise,” Neill Young, an analyst at Cape Town-based Coronation Asset Management, said. “They need to control the cost base and they need to take a firm stand on the wage bill, which is 50 percent, 60 percent of their businesses.”

The spot price of platinum, used in jewellery and catalytic converters that reduce harmful emissions from passenger cars, has climbed 6.5 percent since December 31. It rose as much as 0.5 percent to $1 461.75 (R15 870.2) an ounce last Monday, the highest level since November 7, and traded at $1 460 at 7.23am in Singapore.

Northam Platinum, a smaller producer, late last week settled with NUM for wage increases of up to 9.5 percent in addition to a continuing monthly bonus of R125 to end a strike that lasted more than two months. The company offered an 8 percent increase for the lowest paid workers before the strike began on November 2.

Amcu won’t want to settle for a smaller increase at the big three producers than the deal achieved by the rival Num, said Hanre Rossouw, head of commodities for frontier and emerging markets at Investec Asset Management, which owns Amplats, Impala and Lonmin shares. “The bar is set at double-digit levels,” Rossouw said. “Amcu is not going to settle for less than that. It sets the scene for a big stand-off.”

Even so, platinum producers are “much better prepared. There’s better co-ordination between the chief executives and the companies have been building stockpiles”.

Johan Theron, a spokesman for Impala, said: “It’s within Amcu’s right to call a strike, but we hope they first give us opportunity to negotiate further.” Lonmin spokeswoman Sue Vey declined to comment.

Amcu won’t settle for less than a basic monthly wage of R12 500, Mathunjwa said.

“Do you remember how the government answered our cries with bullets?” Mathunjwa said when he spoke at Wonderkop. “Many men were killed on that hill. Their blood, our brothers’ blood, wasn’t spilt for nothing.” – The Washington Post

The amount Amcu is demanding as basic monthly pay for some workers.

The amount, excluding benefits, currently earned by the lowest-paid underground workers.

The amount of basic pay which Impala and Lonmin have made as a wage-increase offer.

The amount by which the price of platinum has gone down since last year.

The amount of production lost by strikes in 2012.

wage bills.

The companies’

The increase in the spot price of platinum since the end last year.