As the five-month wage strike in South Africa’s platinum sector potentially draws to a close this week, fears are arising that platinum workers may struggle to keep their jobs.
Since the strike began on 23 January 2014, affected producers Anglo American Platinum (Amplats), Impala Platinum (Implats) and Lonmin, have reported losses totalling R22.9 billion. Meanwhile, the 70 000 members of the Association of Mineworkers and Construction Union (Amcu) who downed tools five weeks ago have forfeited R9.9 billion in wages.
This has had a devastating effect on the country’s economy, as well as the viability of the sector and the livelihood of the workers. “Eventual restructuring occurs, with a very high risk of violence between those workers who have chosen to stay and those who are fired,” warns Nomura’s Attard Montalto.
This is something the platinum producers have already warned against in previous weeks, with Lonmin saying last month that the strike is threating jobs at the mine. Meanwhile, Amplats Chief Executive Officer Chris Griffith said in March that he’s willing to shut shafts to prevent the company losing money.
Amplats has been focusing on plans to increase production at mechanized, open-pit mines in a switch from labour-intensive underground excavation.
Nevertheless, Impala Platinum spokesman Johan Theron has denied that restructuring is inevitable, saying that it “will depend on how soon we can restart operations, and how productive and profitable we are once operations are under way again.
“The wage bill puts us under pressure, but the bigger risks are what the rand will be doing, what the platinum price will be doing, how productive our workforce is. The last two years have been horrible in terms of stoppages and productivity.”
Ben Davis, platinum analyst at Liberum, has pointed out that “Mining companies will not be in a rush to restructure operations in the near term as it will simply lead to another strike.” He estimates that “that 10% to 20% of the workforce might not return after the strike. They might have new jobs, resigned so that they could access their pensions to sustain them during the strike, or have opted to return home to avoid repayment of outstanding debts in Rustenburg.”
A resolution is expected early this week, Theron added, saying that the latest offer being mulled over by Amcu members is “a very good deal for workers, and it is not unworkable for us.” Nevertheless, Amcu has yet to provide formal feedback from its members.
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