Platinum, palladium price unmoved by strike talks failure
The latest round of strike negotiations at South Africa's PGM mines ended in failure on Monday prompting the responsible minister to abandon his mediation role.
More than 70,000 workers at the world's three largest platinum and palladium producers, Anglo American Platinum (LON:AAL), Impala Platinumm (OTCMKTS:IMPUY) and Lonmin (LON:LMI), have been on strike since January 23.
Leader of the Amcu union Joseph Mathunjwa said the latest talks broke down after the union refused to compromise on its demand for the immediate implementation of R12,500 ($1,175) a month basic wage.
Newly-installed Minister of Mineral Resources Ngoako Ramatlhodi subsequently made good on a vow to withdraw from the process if no resolution were found by the end of last week.
The nearly five-month long strike has seen mining output in the African nation plummet leading to a contraction in the overall economy during the first quarter.
The companies' which together contribute 40% of global supply have lost combined revenue of some R21 billion ($1.9 billion) while striking workers have forfeited roughly $900 million in wages.
July platinum was little changed on Monday to trade at $1,452 an ounce and is worth less today than when the strike was announced. Year to date platinum is up more than 4%.
June palladium gave up a couple of dollars on the day at $842 an ounce, not far off a three-year high. Palladium hit a record price of $865 in February 2011 and is up 17% this year.
Roughly 10,000 ounces of platinum production and 5,000 ounces of palladium are lost each day the strike drags on. Even when strikers do return to work it would take up to three months to restart production.
South Africa and Russia combined account for close to 80% of global supply of palladium and 70% of platinum output which are mainly used to clean emissions in automobiles.