South Africa platinum strike, talks drag on

by Reuters
Tuesday, 28 January 2014 18:44 GMT

* Weds is final day for this round of talks

* Big 3 platinum producers hit

* AMCU is demanding a "living wage"

By Zandi Shabalala

PRETORIA, Jan 28 (Reuters) - Government-brokered talks between the world's top three platinum producers and South Africa's Association of Mineworkers and Construction Union (AMCU) seeking to end a crippling strike ended on Tuesday with no resolution in sight.

The strike, which began on Thursday and has hit around 40 percent of global output of the precious metal, could be protracted as the two sides remain poles apart on the issue of wages.

"We are not going to divulge what we are talking about. There are offers on the table," AMCU's chief negotiator Jimmy Gama told reporters after several hours of talks ended for the day at a Pretoria hotel.

"I cannot predict what will happen tomorrow, we will continue tomorrow," he said.

AMCU members downed tools on Thursday at American Platinum , Impala Platinum and Lonmin, bringing operations around the gritty mining town of Rustenburg to a halt and dealing a fresh blow to investor confidence in Africa's largest economy.

The strike has hit over 40 percent of global production of the precious metal used to build catalytic converters in automobiles, according to estimates by Thomson Reuters GFMS.

The companies have said that collectively they are losing almost 10,000 ounces a day in lost production worth about $14 million at current spot prices.

Implats' spokesman Johan Theron told Reuters the company had stockpiles to supply customers for six to eight weeks, but said this was its normal pipeline and "does not imply that we have hoarded metal supplies in anticipation of a strike."

"Generally, for an operation like Implats, we can still produce final metals for a period of six to eight weeks once the mining input is stopped, before the process inventories are drawn down."

Under the populist battle cry of a "living wage", AMCU is demanding minimum entry-level pay of 12,500 rand ($1,100) a month from the three platinum producers - a more than doubling of current levels.

The three platinum producers say they can ill afford such increases as they struggle to recover from a wave of wildcat strikes, rooted in a vicious turf war between AMCU and its arch rival the National Union of Mineworkers (NUM), that battered the sector in 2012.

Dozens of people have been killed the past two years in the union conflict and NUM said on Tuesday in a statement that its members, who are not on strike, were being "intimidated and assaulted" if they tried to report to the shafts.

"Since the strike began last week Thursday, intimidation has been high in the platinum belt," said NUM, a key ally of the ruling African National Congress (ANC), which has lost tens of thousands of members to AMCU.

AMCU has long denied allegations that it uses violence and intimidation in pursuit of its agenda.

The companies last week said AMCU's demands were "unaffordable and unrealistic" and have made offers of between 7.5 and 8.5 percent, well above the current inflation rate of 5.4 percent.

Our Standards: The Thomson Reuters Trust Principles.