Platinum giants say union declares dispute in wage talks

Mining in South Africa. Photo from The Minerals Council South Africa’s Facebook page.

Anglo American Platinum Ltd. and Sibanye Gold Ltd. may need mediators to help South African wage talks move forward after negotiations with the platinum industry’s largest labor union reached a deadlock.

Talks with the Association of Mineworkers and Construction Union that began in June have stalled after the union declared a dispute. The producers are now looking to bring in mediators to resolve the standoff internally rather than seeking arbitration from the Commission for Conciliation, Mediation and Arbitration, the companies said.

AMCU officials involved in the talks didn’t immediately respond to messages and calls seeking comment.

The producers have rebuffed AMCU’s initial demands for a 48% wage increase, which some say would lead to job losses and mine closures, but the union has also rejected counter offers. Workers want more money as higher palladium and rhodium prices and a weaker rand bolster the industry’s profit margins.

In 2014, the union led the longest ever platinum strike in the country, costing the industry about $2 billion in revenue

“AMCU declared a dispute, which is normal during wage negotiations,” Amplats spokeswoman Jana Marais said by email. “The matter is being dealt with through internal dispute resolution mechanisms.”

AMCU President Joseph Mathunjwa last month said that Sibanye’s offer was lower than other producers and accused the company of trying to provoke a strike. In 2014, the union led the longest ever platinum strike in the country, costing the industry about $2 billion in revenue. Two years later, it accepted a 12.5% raise for the lowest paid workers, after initially demanding 47%.

While declaring a dispute is part of the process when it’s difficult to reach an agreement, that doesn’t mean a deal is dead, Sibanye spokesman James Wellsted said. Chief Executive Officer Neal Froneman last month said that Sibanye has developed comprehensive plans to withstand a strike, even a prolonged one.

“AMCU has declared a dispute, but we continue to engage with them and the other unions and hope to reach a mutual agreement that is fair but sustainable,” Wellsted said.

Enlisting an external mediator to unlock the dispute could indicate that both sides may be willing to avoid a strike, Albert De Beer, a labor consultant, said. Although palladium is trading near a record and rhodium recently reached the highest in more than a decade, producers have warned against using current prices as a benchmark for a new wage deal.

Talks between AMCU and Impala Platinum Holdings Ltd. are progressing well and a deal there could be reached later this month, Implats CEO Nico Muller said last week. The company plans to seal a deal without any labor disruption, he said.

(By Felix Njini, with assistance from Paul Burkhardt)

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