World’s top platinum miners brace for ‘substantial’ wage demands

Members of the AMCU gathered for a central mass at Mlanje Sports Grounds in the Limpopo East Region – Image courtesy of The Association of Mineworkers and Construction Union via Twitter

South African platinum producers are preparing for significant wage demands as workers eye windfall earnings from a rally in metal prices.

The Association of Mineworkers and Construction Union is meeting its members across the country’s so-called Platinum Belt this week, before presenting demands on Friday to seven producers, including Anglo American Platinum Ltd., Sibanye Gold Ltd., and Impala Platinum Holdings Ltd., Secretary General Jeffrey Mphahlele said. The largest and most militant labor organization in the industry is aware that higher palladium and rhodium prices, plus a weaker rand, have boosted miners’ profits.

“Companies are performing well and we are confident they can accommodate our demands,” Mphahlele said. “Industry has been experiencing a boom in past years but nothing came to the workers.”

South African producers’ earnings boost from palladium, rhodium
Mphahlele said AMCU will ask for more than the basic monthly pay of 12,500 rand ($846) that it’s been targeting for the past seven years. While the lowest-paid workers currently receive 10,800 rand, he said a new goal of 17,000 rand — mooted on the union’s social media platforms — could be adopted if AMCU’s membership wants it.

The demands will be “substantial,” said Dick Forslund, who has previously advised the union and made a presentation at an AMCU conference on June 4.

“It would be very hard for mining companies to plead poverty,” said Forslund, an economist at Alternative Information and Development Centre.

In 2016, the union accepted a 12.5% wage increase after initially demanding 47%. Two years before that AMCU led the industry’s longest-ever strike, costing billions of dollars of revenue and wages.

Anglo Platinum rose 0.8% as of 10:01 a.m. in Johannesburg trading, bringing this year’s gain to 51%. Impala Platinum has jumped 87% over that period, while Sibanye has climbed 57%.

“We expect another tough round of negotiations,” said Jana Marais, a spokeswoman for Anglo Platinum. “Our employees’ disposable income has been under increasing pressure in a difficult economy, while the platinum mining industry also continues to face significant challenges.”

While annual inflation slowed to 4.4% in April, fuel costs have surged and bread and cereals rose by 6.1% from a year earlier.

Still, the wage demands of workers must be set alongside the claims of investors, who have received few dividends from South African platinum producers over the past decade, said Rene Hochreiter, an analyst at Noah Capital Markets Ltd.

“If companies give more than 4% or 5%, then I would be very upset if I was a shareholder,” Hochreiter said. “Why should workers be more equal than shareholders who have provided a lot of capital.”

(By Felix Njini, Paul Burkhardt and Rene Vollgraaff)


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