The South African minister who led the latest round of failed talks in a platinum strike threatening to push the country into recession said job cuts grow more likely as the 20-week pay dispute drags on.
“The longer the strike goes on, the more likelihood of such dismissals,” Minister of Mineral Resources Ngoako Ramatlhodi told reporters today in Pretoria, the capital. “At some point you’re not going to be able to sustain your operations. The situation is grim and quite serious.”
Ramatlhodi stepped down as leader of negotiations to end the labor action that’s halted most local operations owned by Anglo American Platinum Ltd., Impala Platinum Holdings Ltd., and Lonmin Plc., the biggest miners of the metal. The producers have lost 21.9 billion rand ($2 billion) in revenue, making it South Africa’s longest and costliest mining strike. The talks ended without a resolution yesterday.
The worsening labor environment has contributed to “enormous headwinds” facing the country’s economy, South African Reserve Bank Governor Gill Marcus said today. A recession, while unlikely, would be “a very grim outcome.”
Repeated attempts have failed to engineer a breakthrough in the dispute that has idled 60 percent of output in the largest platinum-producing country. Negotiations between the sides earlier crumbled under meditation by the Commission for Conciliation, Mediation and Arbitration.
Later bilateral meetings ended in the companies breaking off discussions and putting a pay offer directly to employees, a move that the union sought to block in unsuccessful legal action. A labor court judge also took the unusual step of mediating company-union talks.
“The parties failed -- I didn’t fail,” Ramatlhodi said. “But they left this meeting yesterday saying they will continue exploring” a resolution. “We hope the parties will go back to court.”
The Association of Mineworkers and Construction Union, the dominant labor group at the mines, wants basic pay for the lowest-paid underground employees to be more than doubled to 12,500 rand a month by 2017. The companies have said that’s unaffordable, offering increases of as much as 10 percent and including allowances for housing in the figure. The country’s inflation rate was 6.1 percent in April.
“The position was to get to 12,500 rand in first year then we moved to four years; in principle we moved to five years,” AMCU President Joseph Mathunjwa said today in an interview on Johannesburg-based television channel eNCA.