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S. Africa's AMCU union revises wage demands, platinum strike continues

Source: Reuters - Tue, 4 Mar 2014 14:32 GMT
Author: Reuters
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* AMCU makes first concession on "living wage"

* Both sides still far apart

* Union plans march in Pretoria on Thursday (Recasts with details, background)

By Ed Stoddard

JOHANNESBURG, March 4 (Reuters) - South Africa's Association of Mineworkers and Construction Union (AMCU) said on Tuesday it had revised its wage demands to the world's top platinum producers, in its first major concession as a sector-wide strike rumbles into its sixth week.

The two sides remain far apart on the issue of wages, however, and AMCU plans a march in Pretoria on Thursday to protest what it says is government bias in favour of the mining companies, suggesting its members still plan to be off work then.

AMCU President Joseph Mathunjwa told a media briefing that the union was now seeking staggered increases that would take the entry wage to 12,500 rand ($1,200) a month in three years' time, compared to an original demand for this increase to be immediate.

The demand for 12,500 rand, under the populist battle cry of a "living wage", is more than double current levels. The mining companies, Anglo American Platinum, Impala Platinum and Lonmin, have offered increases of up to 9 percent, saying they cannot afford steep wage hikes.

"It is a move and a concession on AMCU's side but we are still miles apart. It is still unachievable and unsustainable," Implats' spokesman Johan Theron told Reuters.

Companies point out that the basic wage, which would rise to as much as 7,200 rand a month by the third year under their latest offer, is not the whole picture.

The producers have said that what they have on the table will take the minimum guaranteed pay of entry-level underground employees to between 10,900 rand and 11,900 rand a month in the third year, figures that include allowances and benefits.

AMCU was due to meet with the producers later in the day for further talks. Mathunjwa said the revised demand was made last week and was offered to "give the employers a breather."

In exchange, he said AMCU was willing to scale back or put on hold demands for increases in allowances such as for housing.

ECONOMIC DAMAGE, POLITICAL FALL-OUT

The strike is a fresh blow to investor confidence in Africa's largest economy, helping to push the rand currency to five-year lows in January, and is an unwelcome distraction to President Jacob Zuma and the ruling African National Congress (ANC) in the run-up to general elections in May.

Despite the scale of the strike, which has hit 40 percent of global production of the precious metal, platinum prices fell immediately after the stoppage began on Jan. 23, reaching a one-month low in early February, as traders bet that the availability of above-ground stocks would cushion demand.

The spot price has clawed back those losses as the action has become prolonged, climbing back this week in a rally also inspired by the rising gold price to levels reached in the run-up to the strike. At 1330 GMT spot platinum was 0.75 percent lower on the day at $1,443 an ounce.

The strike is the latest in a series to hit the sector but is unprecedented in that it is being staged at all of the "Big Three" companies simultaneously.

Persistent low prices even in the face of the stoppage have added to the woes of the platinum industry in South Africa, which accounts for about 70 percent of global output.

The industry says almost half of the platinum shafts operating in the country are currently not making money.

This strike has cost producers almost 6.8 billion rand ($628.68 million) in revenue and employees over 3 billion rand so far in lost wages, according to a website streamed by the country's chamber of mines which updates the losses almost every second. (http://www.platinumwagenegotiations.co.za/latest-news/2014)

But Mathunjwa said on Tuesday that AMCU's members remained "steadfast" and that some had returned to their rural villages far from the shafts to wait out the strike - an indication they are digging in for the long haul.

Subsistence farmers in such areas may soon be harvesting maize and other crops, a fall-back strategy for a striking miner with several mouths to feed as he returns to his family plot.

Company sources have also said some of AMCU's striking members, who hail from rural areas in the Eastern Cape province hundreds of kilometres from the platinum belt, have returned home.

AMCU, which often uses marches and protests as displays of force to show it retains rank and file support, still expects a large turnout at Thursday's protest, where it said it will be joined by other unions.

The march will head to the Union Buildings in Pretoria, the seat of South Africa's government, to protest what AMCU says is the government's taking of "sides in favour of the employers."

AMCU accuses mines minister Susan Shabangu of advising the platinum producers to attempt to pursue various legal avenues against the union, which the producers have denied.

There is a political dimension to South Africa's labour strife as AMCU emerged as the top union on the platinum belt in 2012 after wresting tens of thousands of members in a bloody turf war from the once unrivalled National Union of Mineworkers, a key ally of the ruling ANC. ($1 = 10.8163 South African rand) (Additional reporting by Jan Harvey in London; Editing by Susan Fenton)

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