[miningmx.com] – THE CEOs of South Africa’s three largest platinum producers said a three-day process aimed at ending a strike over wages was “off to a constructive start” – a view balanced by a more downbeat appraisal from the union leading the stayaway, the Association of Mineworkers & Construction Union (AMCU).
Lonmin CEO, Ben Magara, and Terence Goodlace and Chris Griffith, the CEOs of Impala Platinum (Implats) and Anglo American Platinum (Amplats) respectively, said in a late night statement that they “… remained hopeful that a successful outcome will be achieved”.
“In the end, resolution must be found,’ they added.
However, in an interview with Bloomberg News, AMCU treasurer, Jimmy Gama, was less enthusiastic about progress: “Nothing much in terms of proper negotiations were taking place today,’ he told the newswire service. Representatives from the companies held discussions among themselves, he added.
The talks are scheduled to continue for a period of at least three days and are being conducted under the auspices of the Commission for Conciliation, Mediation and Arbitration (CCMA), the platinum producers said.
The talks will seek resolution to disputes in regard to wages and conditions of service, and the strike that began on 23 January 2014 with the AMCU looking for a basic salary of about R12,500 per month for entry-level workers.
Platinum producers say they can only afford to pay between 8% and 8.5% and that awarding increases of the order demanded by the AMCU would result in shutting down the industry. Amplats has warned that its restructuring process would be also imperiled by a large increase in its wage bill.
South Africa’s platinum companies will soon start reporting year-end figures where it’s expected that Amplats and Implats will post higher earnings with margins increasing. A better performance will also be recorded by Aquarius Platinum whilst Northam Platinum is expected to report a small loss owing to a 75-day strike at its Zondereinde mine.
The outlook for the platinum producers will also be improved by the depreciation of the rand against the dollar as investors shift funds to developed markets amid signs of some recovery – an outcome that also improves the fundamentals for platinum demand.
The dollar platinum price has been under pressure, however. It shed nearly $20/oz today (January 27) to about $1,415/oz having reached $1,470/oz on January 20 up from around $1,390/oz at the beginning of the year.
“We believe that the slide in platinum and palladium since Friday last week (January 24) is due to the unwinding of some of the long positions that entered the market during the week ending January 22,” said Walter de Wet, an analyst for Standard Bank in London in a report today.
