Platinum mines not making money – Implats

2014-01-24 10:24

Most platinum mines in South Africa are not making any money and cannot afford to pay workers R12 500 a month, Impala Platinum (Implats) has said.

“Business is struggling quite clearly. Most [platinum] mines in South Africa are not making any money,” Implats spokesperson Johan Theron told SAfm in an interview today.

“If you look at Impala, our wage bill is R7 billion, so a 10-odd percent increase is an extra R700 million, which simply we don’t have.”

He said the company was trying to discuss with the unions involved in the platinum sector strike on how to help them improve profitability.

“The conversation we are trying to have with unions is how do we work together to improve profitability so that we can make some of these demands affordable and I think that’s what we should be focusing on.”

A strike by the Association of Mineworkers and Construction Union (Amcu) at Impala, Lonmin and Anglo American platinum entered its second day today. Workers are pushing for an entry-level monthly salary of R12 500. The strike would continue during a meeting between the labour department, the mining companies and Amcu at the Commission for Conciliation, Mediation and Arbitration in Joburg.

Lonmin CEO Ben Magara told SAfm the company had been negotiating with the union since October.

“We have not found an answer, we have not found each other. The employees have chosen to strike because it’s their right. They [the unions] are hoping to shake the tree and hoping something will come down.”

Magara said the demands from Amcu was more than R12 500.

“It is a challenge for us, the industry cannot afford it. We have offered between eight and 8.5%,” he said.

On rand value, the minimum salaries were between R5 800 and R6 000, which would an 8% increase, he said. “This is about 3% higher than the current inflation in the country,” said Magara.

“We are challenged ... We are hoping we find a solution.”

Asked about their strong share price, Magara said the long-term fundamentals of platinum remained attractive and robust.

“The reality is today we are not there yet, we are not delivering where we need it to be.We have to look at all the challenges and create profitable businesses.”

He said no one was benefiting from the strike.

“Every week that we lose, is 2% of their salary [our employees]. We are encouraged by the meeting we are going into now,” Magara said.

Theron said Amcu’s demands were detailed over five pages. The R12 500 was just one demand, he said.

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