Platinum miners take a ‘provocative gamble’ with low wage offers

Employers’ scant wage offers in the “thriving” platinum sector this year are a provocative gamble, a mining analyst warns.

Negotiation season kicked off on the heels of a court battle against a merger by two major employers of the dominant union, the Association of Mineworkers and Construction Union (Amcu), which was asking for a R17,000 base salary hike, amounting to a 48% increase. Rival union National Union of Mineworkers (NUM) asked Anglo Platinum (Amplats) for 15%.

Earlier this year, Amcu lost its court bid to halt Sibanye-Stillwater’s imminent takeover of Lonmin. The latter offered wage hikes of R1,000 a month for the lowest-paid workers and an extra R800 a month over the next two years, while Lonmin offered R300 to R400 over the next three years.

Amcu president Joseph Mathunjwa expressed his disappointment and mining expert Dick Forslund said it was a very ambitious starting point on the part of the employers, given that the platinum sector was far better off this year than it was in the harrowing 2013-2014 economic crunch.

“If you compare today with the situation we were in when there was a months-long deadlock, and taking into consideration the value of money back then, what Lonmin is offering is basically the same as if they had offered an increase of R200 to R350 today. It is almost as if they are trying to provoke the unions.”

Forslund said the market environment, as well as the exchange rate, made for better conditions for the platinum sector than was the case five years ago.

Mining and labour analyst Mamokgeti Malopyane said it was unclear whether the negotiations would go smoother than in previous years, but it was unlikely that Amcu would back down.

“One thing is clear, Amcu will not change its demands.”

Mathunjwa said the union’s R17,000 demand was tantamount to the R12,500 base salary it demanded in 2012.

“Dr Forslund’s research confirmed that our demands are realistic and that our signature demand of R12,500 has been eroded by inflation. He worked with a conservative formula of an average of 4,5% inflation since 2012. You will remember that our R12,500 demand was born in 2012.”

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