South Africa’s Mining Militancy Spreads — Implats Workers Down Tools

on Sep 13, 2012
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South Africa’s Impala Platinum (PINK:IMPUY) is facing a second bid for improved payment from its workers equal to the wage hike granted earlier this year, the world’s second-largest platinum producer announced on Tuesday (September 11). The company concluded wage negotiations with its employees at the end of April following a six-week strike for higher pay. Increases of 8 to 10 per cent were granted and all parties agreed that the new salary package would stand for the foreseeable future. Yet demand for a new wage hike comes only four months later.

Terence Goodlace, chief executive of Impala Platinum (Implats), said: “Should this implementation be effected as per the demand, this would equate to a double increase within six months.” He also pointed out that profit margins were under severe pressure, referring to the industry’s recent struggle to survive as input costs such as electricity have spiked and metals prices have fallen. “We are therefore actively engaging all stakeholders at the highest level, as a sustainable solution can only be delivered through the collaborative efforts of all parties, at all levels,” Mr Goodlace said.

!m[](/uploads/story/352/thumbs/pic1_inline.png)In a meeting with the Interim Workers Committee (IWC), Implats proposed a process of open mediated dialogue with all stakeholders to find a resolution of the labour unrest issue. At the meeting, the company also offered to conduct a full wage review to commence as early as possible to ensure that all stakeholders’ demands are considered and discussed in detail. Mr Goodlace said that the company’s main concern in this process is “to ensure peace, order and stability”, alluding to fears that increasingly militant moves from miners are gaining unstoppable momentum.

Implats’s workers latest sign of labour unrest comes from the company’s mines in Rustenberg, South Africa — the same region where its rival, Lonmin (LON:LMI), has been troubled by violent strikes, which led to the death of 44 people, 34 at the hands of police during a bloody standoff. Currently, strike action continues at Lonmin’s nearby shafts, with the majority of mineworkers refusing to return to work and those attempting to work being threatened with violent reprisals. The rising mining militancy has also spread to gold producers, with Gold Fields (NYSE:GFI) reporting last week that 15,000 miners had embarked on an illegal strike at its KDC operations.

While glaring income disparities have driven labour militancy, the South African mining sector has additionally been shaken by a turf war between the dominant National Union of Mineworkers (NUM), a longtime political ally of the governing African National Congress (ANC), and the militant Association of Mineworkers and Construction Union (AMCU). In consequence, South Africa’s mining industry is being sucked into a vicious circle as labour unrest spreads from platinum to gold with steep wage demands neither sector can afford. But despite the increasing concerns over violent strikes and financial losses in the mining sector, last week South Africa’s Finance Minister, Pravin Gordhan, said that he did not think the labour standoff would affect growth in “any significant way”. “South Africa is still hard at work and most of it is highly productive and that it is still available for investment opportunities as well,” he said.

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