South African platinum mine wage talks to start next week
South Africa’s largest platinum-mining labor union said it will meet the nation’s top three producers on successive days next week as it starts formal negotiations for a three-year wage deal.
The Association of Mineworkers and Construction Union plans to meet Anglo American Platinum Ltd. on July 9, followed by Impala Platinum Holdings Ltd. on July 10 and Sibanye Gold Ltd. the day after that, according to Secretary General Jeffrey Mphahlele. AMCU has asked for a pay increase of as much as 48% as higher palladium and rhodium prices boost company earnings, but some producers say that would lead to job losses and mine closures.
“We will provide clarity on the rationale for our wage demands and take questions,” Mphahlele said. “Thereafter we will wait for companies to give us their offers.”
Implats spokesman Johan Theron confirmed the meeting, while Amplats spokeswoman Jana Marais said the producer would meet with AMCU later this month. Sibanye has yet to finalize a date, said spokesman James Wellsted.
In 2014, AMCU led the longest ever platinum mining strike in the country, costing the sector about $2 billion in revenue. Investors would prefer if the negotiations were expedited, said Arnold Van Graan, an analyst at Nedcor Securities Ltd.
“Wage talks bring about uncertainty, which is bad for workers, communities and investors, so the sooner the uncertainty around wage talks is removed, the better for everyone,” he said.
Investors are nervous because of a lack of clarity over the level of wage increases that companies are able to absorb, said Peter Major, an analyst at Mergence Corporate Solutions. Protracted wage talks could weigh on producers’ stock performance, he added.
“Investors are a bit wary about putting money into platinum shares before negotiations are concluded,” Major said. “You don’t know if it’s going to get messy, and assuming they are talking, but if they are striking then sentiment gets worse. It’s in investors’ interest to resolve this as soon as possible.”
(By Felix Njini)