South
African platinum producers could use Sibanye Gold’s pay settlement with gold
miners earlier this year as a benchmark in wage talks with labour unions,
according to a person familiar with the matter.
Following a five-month strike
that was eventually declared illegal, Sibanye agreed to increase the pay of
workers at its three gold mines by 5.5%. Sibanye’s agreement is viewed as a
good proxy for what’s possible in the platinum industry as the cost structures
are similar to deep-level gold mining, said the person, asking not to be
identified because the matter is private.
Anglo American, Impala Platinum
Holdings and Sibanye last week began the first round of wage negotiations with
the sector’s biggest labour union, which is demanding an increase of as much as
48%. While some producers have said that such a settlement would lead to job
losses and mine closures, the Association of Mineworkers and Construction Union
argues it’s justified as higher palladium and rhodium prices boost company
earnings.
AMCU doesn’t see Sibanye’s gold
deal as a barometer for platinum workers.
"The settlement in gold was
just for gold," said union Secretary General Jeffrey Mphahlele. "Salaries
are too low and we must create a balance, companies must come to the party and
assist the people."
Sibanye’s settlement for gold
miners equated to an
increase of R700 a month in the first year of a three-year deal. In the
second and third years, miners will also get a 5.5% increment or an increase
that matches the inflation rate, should that be higher. While AMCU was
eventually forced to call off its strike, the company was obliged to hold talks
with lenders as it came close to breaching bank covenants.
The platinum wage negotiations
are complicated by additional requests for higher medical aid and travel
expenses, while AMCU has also revived a demand that its members’ pension funds
are transferred by the companies to a fund it founded.
"All our demands are
important because they address the core issues of living standards for the
workers," Mphahlele said.
In 2014, AMCU led the
longest-ever platinum mining strike in the country, costing the sector about $2bn
in revenue. Two years later, the union accepted an increase of 12.5% for the
lowest paid workers, after initially demanding a 47% increment.
"While no one can ever
discount the risk for strike action, it is our concerted view that our
employees remain committed to finding a workable resolution," said Johan
Theron, a spokesman for Implats. "We may differ on the numbers and how we
get there, but at the core we essentially want the same outcome, a profitable
and sustainable business."
Producers would prefer an early
settlement to end uncertainty and boost morale, said James Wellsted, a
spokesman for Sibanye, which became the world’s biggest platinum miner after
its takeover of Lonmin.
"That said, we will not
accept unaffordable wage demands in the interests of an early settlement,"
he said.
Anglo American Platinum said it
plans to negotiate in "good faith" and balance wage demands with
making sure the company remains viable.
"We are committed to
reaching a mutually beneficial settlement as soon as possible," said Jana
Marais, a spokeswoman for the company.