[miningmx.com] – THE rationale for strike action starts to diminish rapidly after the first few weeks as clearly demonstrated by the hapless employees of Northam Platinum.
It is they who sacrificed 20% of their annual pay – a combined R152m – for an increase of between 0.5% and 1.5% above Northam’s initial offer of 7% to 8%, and a R3,000 one-off sweetener, paid in monthly instalments.
That’s the upshot for the rank and file of waging the 75-day strike at the Zondereinde mine which officially ended on January 21.
Perhaps it scored the National Union of Mineworkers (NUM) some additional points as it seeks to win back members in the platinum sector from the dominant Association of Mineworkers & Construction Union (AMCU)?
It certainly didn’t do much for Northam Platinum’s shareholders. They missed out on nearly R750m worth of revenue – R50m more than the amount it raised last year in a rights offer – which means that shareholders who subscribed were actually providing lifeboat funds.
About half of Northam’s shareholders did not subscribe to the offer. So for them, the strike resulted in fruitless dilution. Talk about a zero sum game.
“Nobody benefits; absolutely nobody,’ said Rene Rautenbach, spokesman for Northam Platinum. “If you give up one month’s wages, that’s a twelfth of your annual salary which is the same as 8%. If you get an 8% wage increase you have gone nowhere,’ he says.
It’s not all bad for Northam. It had some inventory from the smelter breakdown at Zondereinde earlier in 2013 which it was able to sell during the strike. But in terms of forgone production, or cash flow, the hit was R749.7m.
Attention now switches to the progress of AMCU’s strikes which are due to start today (January 23), and at some of the country’s gold mines, probably in February owing to likely legal challenges against the action.
Again, ironies abound. By staging a strike at Anglo American Platinum (Amplats), AMCU runs the risk of undoing its good in October when an 11-day strike at the company helped preserve about 3,000 jobs. Those jobs may now be in peril.
