LONDON (MINEWEB) – As we reported here earlier, the latest round of government mediated talks between the Association of Mineworkers and Construction Union (AMCU) and the platinum miners running the mines which account for 30-40% of South Africa’s platinum output, broke down yesterday and the new South African Mines Minister, Ngoako Ramatlhodi, and his team have withdrawn from the negotiations – at least for now. However platinum exports are so key to the South African economy that one suspects further efforts will be forthcoming.
With the South African government mediators ditching recent platinum strike negotiations we look at potential outcome regardless of who wins or loses.
The principal mining companies involved – Anglo American Platinum (JSE:AMS), Impala Platinum (JSE: IMP) and Lonmin (LON:LMI) have thus released a joint statement to the effect that this latest round of negotiations ‘have been dissolved without an outcome’.
AMCU’s President, Jospeh Mathunjwa issued his own statement thus: “AMCU made many concessions. We actually moved twice to make employers move closer to us,” he said, but added that the union did not compromise its demand for a 12,500 rand ($1,200) a month basic wage, which excludes allowances. And it is these allowances, which in percentage terms are quite significant, which are the key here. The mining companies have moved to say they will meet the demands for a R12,500 minimum wage by 2017, but this would include these benefits and the union says this is unacceptable and has clung to its position no matter what. It has not given any significant ground in its demands right from the start.
As a consequence the strikes have been in place for coming up to 5 months now (since January 23rd) and there’s little sign of any movement at all from AMCU’s entrenched position. It has probably cost the miners somewhere around R2.5 billion (ca US$230 million) in lost output, although perhaps not so much in lost revenues as they had built up substantial stockpiles ahead of the strike and have mostly been able to meet their supply commitments from these.
But the stockpiles will now just about be empty and the miners will have to start buying in metal to meet their commitments – or declare force majeure assuming such a clause is in the contracts.
So the strike may be about to enter a new phase. While the stockpiles remained the miners, in theory, held the whip hand. But if they now have to source supplies themselves to meet commitments it gives the Union more bargaining power unless it faces untenable pressure from its members for a return to work – and so far it has managed to hold off from this – albeit intimidation and death threats for workers who go back to work is probably playing a significant part here.
However there has also been remarkable solidarity among the workers who have obviously not been paid now for 5 months and are very much on the breadline – indeed how they are managing to survive at all probably remains a mystery to the mining companies and the government alike who had perhaps relied on the strike breaking down some months ago.
But it should be borne in mind that the majority of the mineworkers may well have come from a subsistence economy in their original homelands and they can probably cope with lack of earnings far better than other worker groups who have not experienced this kind of economy in the near past.
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