[miningmx.com] – ROYAL Bafokeng Platinum (RBPlat) lifted some of the gloom surrounding South Africa’s parlous labour and wage conditions agreeing a ground-breaking deal with the National Union of Mineworkers (NUM).
The agreement, concluded through negotiations rather than a strike, links wages to productivity and allows for the phasing out of a living out allowance. In essence, RBPlat will absorb an average 9.1% cost-to-company increase over three years.
“This agreement provides RBPlat, and all our business partners, with a critical measure of stability as we continue to focus on growing our business for the benefit of all our stakeholders,” said Steve Phiri, CEO of RBPlat.
The agreement includes a R2.8bn housing scheme that will see 3,100 houses built for employees over a five-year period. During the period, a housing fund contribution will be introduced to replace the living out allowance.
The agreement, which also includes an increase in the minimum wage, can be reviewed in May 2017, a month before its expiration, in order to keep the minimum wage in line with the rest of the platinum industry, and then extended for a further two years.
The lowest paid underground workers will get a monthly top up of R2,000 for the first year, R2,400 for the second year and R2,806 for the third year for the duration of the wage agreement, said the NUM in a statement. “This agreement will see the lowest paid worker earn over R12,000 a month within this period,” it said.
The agreement comes barely a month after the conclusion of a five-and-a-half month strike that was waged by the Association of Mineworkers & Construction Union (AMCU), the longest industrial action in South Africa.
AMCU’s wage agreement resulted in a cost-to-company increase of 11% to 12% on average, but cost employees and the industry a combined R30bn, and is likely to lead to restructuring at the mines of Impala Platinum, Lonmin and Anglo American Platinum.
RBPlat said its agreement with the NUM, following a period of negotiations that date back to February, will incorporate a 7% increase in other allowances for the first two years and remain unchanged for the remaining three years of the five-year deal. The increases will be effective from 1 July 2014.
Each year of the agreement, beginning 1 July 2014, all employees within the A to D1 categories will receive increases on their basic pay, on a sliding scale with employees such as rock drill operators receiving 10.5%, 10.5% and 9.5% increases for the first three years.
A1 to B7 Band employees (excluding rock drill operators) will receive 10%, 10% and 9% each year; and employees in the supervisory bargaining unit will receive 8%, 8% and 7% each year, RBPlat said.
The NUM said its agreement, especially on wages paid to the lowest paid workers “… compares favourably with the settlement reached by some of the major platinum producers after an internecine five-month-strike action”.
Of assistance to RBPlat was the fact that the NUM had engaged in a damaging 75 day strike at the premises of Northam Platinum’s Zondereinde mine which ended on January 17 and resulted in two year wage increase of between 8.5% and 9.5%.
The RBPlat settlement also bodes well for Aquarius Platinum which agreed a wage deal in February 2013 with the NUM at a level slightly above the rate of inflation of about 5.2% at the time.
In terms of its housing plan, RBPlat will oversee the construction of 3,100 houses – 400 are already built in a pilot scheme – that removes the social risks of hostel accommodation and allows miners’ families to live together.
“We decided it was important to look at this holistically and to have a good relationship with unions,” said RBPlat CFO Martin Prinsloo in June.
“There’s no silver bullet to good worker relations but the housing has several benefits to the business, especially from a social point of view,’ said Prinsloo.
