Platinum strike causing 'irreparable' damage

Johannesburg - Platinum producers Anglo American Platinum [JSE:AMS], Impala Platinum [JSE:IMP] and Lonmin [JSE:LON] said on Tuesday a strike now in its ninth week at their South African mines was causing irreparable damage to the sector and local economy.

Wage talks have broken down between the companies and the striking Amcu union, which is demanding a doubling of basic wages, although the world's top three platinum producers said they were open to discussions "within a reasonable settlement zone".

In a joint statement, the firms said they had lost nearly R10bn rand in revenues, but also pointed to the cost to communities around the mines in the platinum belt northwest of Johannesburg .

"The financial cost... does not tell the full story," the companies said. "Mines and shafts are becoming unviable; people are hungry; children are not going to school; businesses are closing and crime in the platinum belt is increasing."

They also hinted at longer-term restructuring and mass layoffs in an industry that employs more than 100 000 people.

"Sadly, as the industry progresses towards greater mechanisation and higher skills levels, which are aligned with higher earnings and greater productivity, so the number of people employed in the industry will decrease," they added.

Miners near Rustenburg, the main town in the platinum belt, told Reuters last week they were having to sell cattle to make ends meet, while local business owners spoke of collapsing trade because many migrant workers had simply gone home.