Cape Town, South Africa — 25 June 2013 – Analysts say that Lonmin plc, the world’s third-largest platinum producer, may face a strike by its biggest union, depending on a ruling tomorrow over the labour group’s recognition rights.
“There’s a 50-50 chance of labour action should the Association of the Mineworkers and Construction Union (AMCU) be dissatisfied with the outcome of arbitration,” Bloomberg News quotes Cadiz Corporate Solutions mining analyst Peter Major, as saying in a telephone interview from here. “It’s really on the precipice.”
The AMCU has unseated the National Union of Mineworkers (NUM) as the dominant union at the three biggest platinum producers in South Africa. The change isn’t yet formally recognised by Lonmin, which favours allowing its workers to belong to a choice of unions.
Rivalry among mine unions has contributed to some of the worst labour violence South Africa has witnessed since the end of apartheid in 1994. In August, police killed 34 protesters at Lonmin’s Marikana platinum mine during a strike that formed part of a wave of labour disruptions for the industry.
The Commission for Conciliation, Mediation and Arbitration in Johannesburg will rule tomorrow on what recognition rights the AMCU is entitled to at Lonmin. The union speaks for more than 70% of the lower-skilled workers at the company and also wants to lead negotiations for higher-skilled employees, where it has fewer followers.
“AMCU is asking for a bit too much representation,” said Michael Kavanagh, a Cape Town-based metals and mining analyst for Noah Capital Markets. “My base-case assumption is that the representation agreement will end up looking similar to that which Lonmin had with the NUM previously,” he said, “with AMCU’s recognition limited to the lower-skilled segment.”
The NUM and two other unions, Solidarity and UASA, hold recognition agreements for skilled workers at Lonmin, and each has membership of more than 20% of employees in that segment.
Members of both the AMCU and the NUM have been shot near Lonmin operations in the last few months. Lonmin wouldn’t speculate on the likelihood of further conflict over union recognition.
“We remain committed to the arbitration process and believe the outcome will be in the best interests of all,” Lonmin spokeswoman Sue Vey said in an e-mailed response to questions.
The NUM has until July 16 to regain its majority among the Lonmin workforce or lose its office and associated rights, a Johannesburg labour court has ruled.
While the union has started a recruitment drive at Lonmin shafts to regain support, its primary goal is to hear worker concerns, said NUM spokesman Luphert Chilwane. “The majority of them are saying that they’re tired of the violence and they want it to end.”
AMCU said on June 13 that it was postponing a threatened strike over recognition rights to give the government time to ‘understand the challenges’’ the group faces “’ particularly at Lonmin.
Source: Bloomberg News. For more information, click here.