South African platinum strike could be over soon

The world’s three largest platinum companies and the biggest union at their South African mines agreed on proposals that the labor body will take to members to try to end a 20-week pay strike.

“‘In-principle’ undertakings have been reached with the leadership of the Association of Mineworkers and Construction Union in respect of wages and conditions of employment,” Impala Platinum Holdings Ltd., Anglo American Platinum Ltd. and Lonmin Plc said in a joint statement. Platinum and palladium prices dropped on the news.

Impala workers agreed to the plan at a rally held at one of its shafts today, AMCU President Joseph Mathunjwa said at the meeting. Employees raised six points they want the union to discuss with the company, he said.

The AMCU is meeting workers at Anglo American Platinum and will then engage employees at Lonmin. The companies expect to get a response from the union tomorrow.

More than 70,000 members of the union have been on a strike over pay since Jan. 23. Producers say workers have missed out on 9.9 billion rand in wages and that they have lost 22.1 billion rand in revenue.

The country’s mines minister said June 9 that he was withdrawing from efforts to resolve the walkout, which has disrupted production in the country that accounts for about 70 percent of global mined platinumproduction.

Surprise development

“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 Plc, said by phone. “That’s what the equities and the metal prices are showing at the moment.”

Impala offered to improve the basic monthly wage of its lowest-paid miners by 1,000 rand ($94) in the first and second years, AMCU Treasurer Jimmy Gama told workers as he read from a letter by the company dated yesterday. That compares with a previous plan of 580 rand in year one and 680 rand in year two.

It also offered an increase of 950 rand a month in years three to five of the proposal, compared with 750 rand in year three, 840 rand in year four, and 900 rand in year five, he said.

“We are not disclosing the details until we have heard back from AMCU,” Charmane Russell, a spokeswoman for the three producers at Russell and Associates, said in an e-mail. “The process is a very sensitive one and we will ensure that we act in good faith.”

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