[miningmx.com] – ROYAL Bafokeng Platinum (RBPlat) described itself as “cautiously optimistic” that it could conclude a new wage deal at its Bafokeng-Rasimone Platinum Mine (BRPM) later this year.
“Obviously, the outcome of the strike [in the platinum sector] will have a bearing. We are close to the rumblings from next door,” said RBPlat CFO, Martin Prinsloo.
“But we have mature union representatives at the mine, and a good relationship,” he said. “I’d say we are cautiously optimistic.”
RBPlat said on February 4 at its full year results presentation in Johannesburg that it was due to start wage talks with National Union of Mineworkers (NUM) as a three-year wage deal was due to expire in June.
RBPlat CEO, Steve Phiri, said the company would “… like to start negotiating as early as possible so we don’t waste time to-ing fro-ing. Without a mutual beneficial wage agreement we have seen what has happened in the industry”.
“We see the wind that is blowing through the industry. We want to avoid adverserialism in the industry,” he added.
The risk for RBPlat is that the NUM decides to use wage talks as a means of attracting new members in the sector. In this scenario, it would drive a hard bargain and attempt to show itself as equally as hardline as rival, the Association of Mineworkers and Construction Union (AMCU).
Analysts say, however, the risk of that is low. “NUM has already played that game out at Northam [Platinum],” said Michael Kavanagh, an analyst with Noah Capital. “So I think the risk at RBPlat is lower,” he said.
Hanre Rossouw, an analyst with Investec Asset Management said the RBPlats was among the most respected in the mining sector regarding its labour relations. “I think also that RBPlat is dealing mostly with NUM with very little AMCU presence which may make NUM feel less threatened,” he said.
He added, however, that he’d have preferred RBPlat to raise capital after it had signed a wage deal. “The company already has a strong cash position so I can’t understand the urgency,” said Rossouw.
RBPlat completed a R600m book-build on February 4 in which the company nor its joint venture partner, Anglo American Platinum, did not participate. As a result, RBPlat’s free-float had increased to 34%, said Prinsloo.
The book-build, completed at R62/share, would be followed by a rights issue. RBPlat and Amplats had already agreed to follow their rights and participants in the book-build were expected to do the same.
Said Kavanagh; “I’ve not problem with the timing. There are no labour problems, equity prices are quite elevated so I can’t fault them on the timing,” he said.
