South African platinum strike talks going nowhere
South Africa’s top three platinum producers Impala Platinum (LON: IPLA), Anglo American Platinum (LON:AAL) and Lonmin’s (LON:LMI) effort to seal a wage deal with the Association of Mine workers and Construction Union (AMCU) is still looking grim, according to Reuters.
The 16-week wage strike is taking a heavy toll on the three companies which have reportedly lost more than $1.6 billion in revenues to date.
“A deal with AMCU at this point in time seems completely out of the question,” Anglo chief executive Chris Griffith told South Africa’s Talk Radio 702. “This is not going to be an easy conversation.”
He added that the miners are demanding their wages to more than double, an increase the three companies have repeatedly said is unaffordable.
AMCU rejected the producers’ latest offer of 12,500 rand (US$1205.68) a month by 2017 with benefits last week.
Global platinum production have been cut by about 40% and the price of platinum jumped last week, after GFMS Platinum & Palladium Survey 2014 stated roughly 10,000 ounces of platinum production and 5,000 ounces of palladium are lost each day the strike drags on.
The country’s longest mining strike has stirred violence, including two Lonmin workers reportedly killed Monday.
Lonmin CEO Ben Magara said in a statement Monday the strike had put “enormous” pressure the already struggling industry and the business “will have to be restructured, with consequences on job losses.”
South Africa, Africa’s largest economy, holds about 80% of the world’s platinum reserves, accounting for about 70% of global output.