Amcu snubs Lonmin peace deal

2012-09-06 14:13

Johannesburg - Militant Amcu union refused to sign a "peace deal" with platinum company Lonmin [JSE:LON] on Thursday, undermining government-backed efforts to open pay talks and end a four-week strike scarred by deadly violence.

While Lonmin, the world's number three platinum producer, signed the accord with the National Union of Mineworkers (Num) and other labour groups in the early hours, representatives of the Association of Mineworkers and Construction Union (Amcu) declined to put their name to the agreement.

"We didn't sign," Amcu National Treasurer Jimmy Gamma told Reuters, declining to give further details.

Amcu-affiliated miners at the Marikana platinum mine where police shot dead 34 striking rock-drill operators last month said they were not interested in a deal that failed to include a basic wage hike to R12 500 a month - double what they now earn.

"I was there to talk about R12 500 not some peace accord, so we did not sign any document," Molefi Phele, who represented striking workers, told Reuters Television.

Lonmin said it was open to talks with AMCU and striking workers on their wage demands - provided they returned to work by a Monday deadline - even though analysts say the company can ill afford such an increase.

The London-headquartered company said only 1.7% of workers reported for duty at its South African operations on Thursday with miners saying they have been threatened with death if they went back to their jobs.

On Wednesday, more than 3 000 striking miners marched through streets near the mine, 100 km northwest of Johannesburg, in the largest protest since the August 16 shooting, South Africa's bloodiest security incident since the end of apartheid in 1994.

There was no violence, though some of the stick-waving demonstrators threatened to burn the mine to the ground and kill its management if their demands for better pay and working conditions were not met.

Lonmin shares, which had lost 25% of their value since August 16, jumped around 5% in early trade in Johannesburg and London amid hopes that the "peace deal" would open up a path to a settlement, despite Amcu's holding out.

"With this agreement the moment has arrived for Amcu and the striking workers to show whether or not they can function in a peaceful environment," said Gideon du Plessis of the Solidarity union of skilled workers.

Challenge to power

Marikana accounts for the vast majority of the platinum output of Lonmin, which itself accounts for 12% of global supply of the precious metal used in jewellery and vehicles' catalytic converters.

World platinum prices, which spiked more than 2% as the Marikana carnage unfolded, have continued to rise, and hit $1 584 an ounce on Thursday, the highest in nearly five months.

The strike has raised worries that labour unrest on the platinum belt could spread to the gold sector. South Africa is home to 80% of known platinum reserves and is the world's fourth-largest gold producer.

The violent rise of Amcu in the last 12 months is also the most serious challenge to the unwritten pact at the heart of the post-apartheid settlement - that unions aligned to the ruling ANC deliver modestly higher wages for workers, while ensuring labour stability for big business.

President Jacob Zuma cut short a foreign visit in the immediate aftermath of the Marikana shootings, but his wooden performance and heavily staged-managed meetings with victims and miners has damaged his "man of the people" image.

Zuma faces a re-election battle as leader of the ANC in December, and the crisis has given ammunition to critics who say he is compromised by links to industry and the powerful union movement, of which the Num is a leading player.

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