Wage negotiations in South Africa’s platinum sector have been ongoing for almost four weeks, with Amcu remaining resolute, but the platinum companies have finally issued an ultimatum to striking workers.
The Association of Mineworkers and Construction Union (AMCU) and platinum producers Anglo American Platinum (Amplats), Impala Platinum (Implats) and Lonmin have been engaged in a deadlock, with workers demanding a minimum monthly wage R12 500, which platinum bosses have labelled “unrealistic and unaffordable.”
“Considering that the current minimum monthly wage at the three companies ranges from R5 000 to R5 700, this would mean increases of up to 150%. Increases of that order would be impossible for any business, but for a sector already facing financial crisis, the consequences would be disastrous for all concerned,” the platinum CEOs Chris Griffith, Terence Goodlace and Ben Magara said in a statement.
The mine bosses have accused the union of bargaining in bad faith, saying that “give and take” is needed. Griffith has curtly said that Amcu refuses to accept the economic circumstances facing the industry, and that the union clearly has no interest in preserving jobs. He expects “pain to be felt” once pay day arrives.
The platinum sector is currently offering a minimum 7% increase in each of the next three years, but has warned that even this offer is unaffordable, especially considering that South Africa’s inflation rate is at about 5.4%.
The effect of the strike action on the sector has not been a small one, with losses currently estimated at R4.4 billion in revenue and R1.94 billion in employee’s wage losses. “These losses by both the companies and their employees will never be recovered,” said the platinum CEOs. “Prolonged strike action would further exacerbate the current situation and may result in further job losses.”
Furthermore, the three producers are considering having the strike declared illegal and unprotected, stating that Amcu’s actions have been unlawful. They say there have been extensive reports of both overt and covert intimidation at the various operations, as well as injuries and damage to property. This follows Amplats filing to sue Amcu for close to R600 million in damages resulting from ongoing strike action.
Whether or not this hardball tactic will have a sobering effect on Amcu remains to be seen, but Griffiths has warned that the continued strike action is undermining investor confidence in the country and that living conditions can only be improved if business thrives.