[miningmx.com] – IMPALA Platinum (Implats) said it was seeking a fresh
agreement on how it recognises unions at its Lease Area mine in an effort to halt five
months of labour unrest, a period that may slash full-year output 200,000 ounces.
“We hope to establish an interim committee and bring the parties together to
formulate rules rather than the “winner takes all’ approach,’ said David Brown, CEO of
Implats. He was responding to questions following a presentation of Implats’ third-
quarter production figures where he indicated the Lease Area might only produce
some 750,000 oz for the year. The Lease Area normally produces about 950,000
oz/year, enough to make it contribute roughly half of Implats’ total output.
A revised labour recognition scheme is in the wake of revelations that the National
Union of Mineworkers (NUM) suffered 10,813 resignations among the mine’s 30,000-
strong mine complement at the Lease Area, of which roughly 22,000 were unionised.
Rival union, the Associated Mineworkers and Construction Union (Amcu), has claimed
8,000 in new members. These figures were being verified by an independent third
party, a process that could take three weeks, said Johan Theron, spokesman on
labour relations at Implats.
However, the legislative process of recognising a new union, which would require
Amcu to show it had more than 50% of total unionised staff at the mine, could take
five months or more. As a result, Implats wanted to establish “a multi-target
recognition agreement sooner rather than later’. “We’re trying to get the parties all in
to one room,’ commented Brown, who said he thought positions “would soften’ when
membership figures became visible to all parties.
Amcu has seized the initiative in labour-employee relations at the mine in
controversial style because it is blamed for intimidatory tactics. There have been
several violent incidents at the Lease Area, where it’s thought NUM representatives
have bullied from their posts and have almost no influence on the ground.
Analysts expressed concern that Amcu, as a majority union, would effectively signal a
period of volatile labour relations at the Lease Area. Already, production at the Lease
Area was 120,000 oz lower owing to the strike alone, resulting in a revenue “loss’ of
an estimated R2.5bn. In fact, production was still ramping up following the strike with
capacity set for June. Capital expenditure plans at the Lease Area had not been
affected, however, Brown said.
But there was a structural cost effect. Brown estimated that labour-related costs
could be as much as 1.5% higher, topping out at 10.5% for the year after Implats
agreed to “promote’ rock drill operators (RDOs), and implement several months early
the annual increase, the second part of the two-year instalment agreed in 2010.
INDIGENISATION
Implats’ no less important negotiations with the Zimbabwean government on the sale
for compensation of a 31% stake in Zimplats almost took a back seat set against the
fiery developments at the Lease Area.
However, Brown lifted the curtain slightly on the state of negotiations, saying that
the Zimbabwean government was still insisting on a portion of free-carry for the
shares in Zimplats.
The negotiations surround compliance with Zimbabwe’s indigenisation strategy that
calls for 51% of assets within the country, operated by foreign owners, to be given to
the state. About 20% of the company was being handed over to the mine’s local
community and employees, effectively on a free-carry basis.
“The sticking point is that the [Zimbabwean] government wants free equity and we’re
saying this is not part of the process,’ Brown said.
This was almost certainly Brown’s last public engagement with press and analysts
ahead of his resignation at Implats, which is scheduled for the beginning of June. He
will be replaced by Terence Goodlace, formerly of Metorex and Gold Fields, who has
recently returned from an overseas trip.
