[miningmx.com] – A REVISED offer tabled by the world’s three biggest platinum producers, aiming to end a three-month strike, will be insufficient to get negotiators to a settlement before the elections on May 7, said Investec Asset Management.
Producers and union leaders are meeting this week to discuss the revised offer tabled last Thursday, with Impala Platinum and Anglo American Platinum (Amplats) offering entry-level underground workers a cash remuneration of R12 500 by July 2017. It is understood Lonmin made a similar offer.
The Association of Mineworkers and Construction Union (Amcu) is demanding a basic wage of R12 500 by 2017. The cash remuneration offer includes living-out allowances and holiday leave allowances.
“The revised offer is a step in the right direction, and the producers are speaking the same language as the union in terms of the R12 500. The talks may be in the last lap, but we are not in the home stretch yet,’ said Hanre Rossouw, Investec Asset Management’s head of commodities for frontier and emerging markets.
Amcu is yet to take the new offer to members. One company source close to the negotiations said it is difficult to predict what will happen during the talks this week. “Today, I expect everyone’s sitting around the table with their calculators trying to make sense of the new offer and making sure they understand exactly what it entails. We will update the market if there is significant movement,’ said one company source close to the negotiations.
The new offer equates to cash remuneration rising between 7.5% and 10% across various job categories, up from an initial offer of between 7.5% and 9%. Producers warned that the wage offer is unaffordable and said unsustainable increases in labour costs, which account for up to 60% of annual production costs, will be “catastrophic” to the future viability of the industry.
“The sad reality is that the wage talks will be followed by talks about section 189s (retrenchment notices). There will be no winners from this strike,’ said Rossouw.
Given the battles between Amcu and the National Union of Mineworkers (NUM), it is unlikely that Amcu would settle for any offer less than the increases achieved by NUM at Northam Platinum in January, Rossouw said.
The 11-week strike ended in workers receiving increases of up to 9.5% and a once-off payment of R3 000, spread over two years. This brought the overall increases on basic wages to between 9.8% and 11.8%, NUM said at the time.
Amcu will likely drag out the strike until after the elections, given the “politics and personal vendettas involved’, said Rossouw. Communication with members will be difficult due to a number of public holidays next week and the large numbers of workers who have left Rustenburg for their rural homesteads.
While Amcu has no formal political ties and its president Joseph Mathunjwa has denied having political ambitions, opposition parties including the Economic Freedom Fighters and the United Democratic Front enjoy support among its members. It has also been accused of working closely with the National Union of Metalworkers (Numsa), the country’s biggest union, which has been critical of the leadership of Cosatu and its alliance partner the ANC.
Mathunjwa, who couldn’t be reached for comment, has an acrimonious history with ANC secretary general Gwede Mantashe, who was in charge of NUM when Mathunjwa got fired from the union, leading to the formation of Amcu in 1999.