Johannesburg - A violent six-week strike at world No. 3
platinum producer Lonmin [JSE:LON] has come to an end with a hefty wage settlement that
could stir more strife in South Africa's restive mining sector.
Lonmin's 11-to-22% pay hike deal with striking workers may
be a red rag for others in an industry riven by income disparities laid bare by
a wave of violent industrial action in which 45 people died last month.
As Lonmin's miners prepare to don their helmets and head
back down the shafts, others are eyeing their gains greedily.
"We want management to meet us as well now. We want R9
000 a month as a basic wage instead of the roughly R5 000 we are getting,"
an organiser with the militant Association of Mineworkers and Construction
Union (Amcu) at Lonmin rival Impala Platinum Holdings [JSE:IMP] told Reuters.
He declined to be named for fear company recriminations.
Amcu exploded onto the South African labour scene in January
when its turf war for members with the dominant National Union of Mineworkers
(Num) led to the closure of the world's largest platinum mine, run by Implats,
for 6 weeks.
The discontent rolling through the platinum belt has found
fertile ground in the shanty-towns that ring the mines.
The communities that serve the platinum companies sit
side-by-side in the dusty "platinum belt" - proximity that will make
the Lonmin deal a source of jealousy for workers from other mines.
Anglo Platinum [JSE:AMS], the world's top producer of the
metal used for catalytic converters in cars, was last week forced to suspend
its Rustenburg operations, 120 kms northwest of Johannesburg, because of the
Those mines rebooted on Tuesday but its workers will be
tempted by the pay hikes achieved just down the road in Marikana, where 34
striking Lonmin workers were shot dead by police last month in the worst such
incident since the end of white rule in 1994.
"The ripple effects will continue to be felt. The
outcome of the negotiation at Marikana will likely set a new benchmark for
mining more generally and wage costs are set to rise substantially," JP
Morgan said in a research note.
Wage hikes in the mining sector have been leap-frogging
inflation for years, reducing margins in the industry as productivity has
struggled to keep pace.
But your typical miner has several dependents to feed and so
pay rises that outpace inflation may not go far as the gains evaporate at the
kitchen table. Racing food inflation due to soaring global grain prices will
only stoke workers' hunger.
The gold sector has also not been spared, with 15 000 miners
at the KDC West operation of Gold Fields [JSE:GFI], the world's fourth largest
bullion producer, on an illegal strike.
However, unlike the platinum miners, Gold Fields and its
bigger rival, Anglo Gold Ashanti [JSE:ANG], have both diversified away from
their home base and now get half or more of their output from outside South
Gold Fields' chief executive Nick Holland told Reuters on
Monday his company could "go on for quite some time" despite the KDC
Platinum producers do not have this choice because 80% of
the metal lies below South Africa's soil. Lonmin was brought to its knees by
the strike because all of its mines were effectively shut.
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