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Platinum sector seeks bargaining model

Johannesburg - The platinum industry is considering a centralised collective bargaining model, Lonmin [JSE:LON] acting CEO Simon Scott said on Thursday.

"There are industry discussions taking place, within the context of the Chamber of Mines," he told reporters in Johannesburg.

"Surely if you get involved in some sort of centralised (negotiations), this could be a way forward."

Executive manager of human capital at Lonmin, Abey Kgotle, said it was important that a centralised bargaining structure be well thought out and as inclusive as possible.

"There is not a silver bullet for how that is going to be."

The National Union of Mineworkers (Num)and many other parties had called for centralised bargaining.

At present, the mine was trying to get operations back to normal after the wildcat strike, which was marked by violence.

On Thursday around 80% of workers returned to their jobs. The first three days would focus on induction, with blasting expected to resume next week.

Scott said workers received an increase of between 11% and 22% in terms of the deal, reached on Tuesday night. The deal was an addendum to an existing wage agreement.

The deal meant that the lowest underground worker would now earn R9 611 (up from R8 164), a winch operator would earn R9 883 (up from R8 931), a rock drill operator would earn R11 078 (up from R9 063) and a production team leader would earn R13 022 (up from R11 818).

Asked how much the wage increases would cost Lonmin, Scott said he could not provide an answer.

"We can't say immediately how much this will cost the company."

It was not simple to work out as expenses such as overtime and bonuses needed to be taken into account, he said.

The unprotected strike had incurred significant cost for the company and the economy.

"Loss of revenue is not an insurable event."

Scott said Lonmin was sure that, in time, it could rebuild confidence in its operations.

"(During the strike) there was a lot of concern from shareholders, especially international shareholders who find it difficult to contextualise."

In the short-term, however, the industry was in a "very tough" situation because of industry pressures, including weakness in the platinum price. It was within this context that the wage negotiations took place.

Despite the difficulties the industry faced, Scott said he believed it had a future in South Africa.

"The platinum industry can get investors to believe in the industry again, (but) we need to navigate the short-term, while markets are tight, very carefully."

The miners went on strike on August 10, demanding a monthly salary of R12 500.

Kgotle dismissed reports that the strike was related to tensions between the Num and the Association of Mineworkers and Construction Union, saying it was only motivated by the wage demand.


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