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South Africa platinum strike damage irreversible, losses close to $1bn

South Africa platinum strike damage irreversible, losses close to $1bnSouth Africa’s platinum miners said Tuesday the two-month strike is severely damaging the sector, which has lost nearly a billion dollars in revenue to date.

“The extended strike in the platinum belt is unprecedented, and at a stage where some of its impacts are becoming irreparable,” said in a joint statement the world’s top three producers, Anglo American Platinum (or Amplats), Impala Platinum (JSE:IMP) and Lonmin (LON:LMI).

The companies added the financial cost of the strike doesn’t really tell the full story: “Mines and shafts are becoming unviable; people are hungry; children are not going to school; businesses are closing and crime in the platinum belt is increasing,” the companies said.

The platinum titans urged the radical Association of Mineworkers and Construction workers Union (AMCU) to come back to the negotiating table, as they said, a settlement must soon be found “for the sake of our companies, our employees, the sector as a whole and everyone adversely affected by the strike.”

The group wants the workers’ basic salary increased to $1,155 (12,500 rand) a month for the lowest paid workers over a period of four years.

Anglo American Platinum (LON:AAL) said this would represent an average annual increase of 29%, which they said was “unaffordable”.

South Africa, Africa’s largest economy, holds about 80% of the world’s known platinum reserves, accounting for about 70% of global output, used for jewellery, catalytic converters in vehicles, and as a key source of hard currency for the country, among other applications.