Joseph Mathunjwa: There is light at the end of the tunnel

2014-06-13 10:17

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Amcu leader Joseph Mathunjwa said today a wage deal with the world’s top three platinum producers was imminent, signalling a possible end to the country’s longest mining strike.

Workers from the Association of Mineworkers and Construction Union (Amcu) begged Mathunjwa yesterday to end a five-month stalemate and sign the latest offer – an increase of about 20%, or R1 000 rand a month.

Mathunjwa told Joburg radio he hoped to meet with leaders of Lonmin, Anglo American Platinum and Impala Platinum later today or over the weekend to relay the response of his members to their offer.

“At least there is light at the end of the tunnel, which is not the light of a goods train,” he told Talk Radio 702.

The major outstanding sticking point was whether the wage deal should stretch over three or five years, he said.

“We are in quite a sensitive stage of trying to resolve this and reach an agreement. We won't do things haphazardly,” he said.

South Africa is home to 80% of the world’s known platinum reserves and the strike has halted production at mines that usually account for 40% of global output of the precious metal.

The strike by the 70 000 Amcu members began in January and dragged Africa’s most advanced economy into contraction in the first quarter as mining output fell at the steepest rate in half a century, pulling manufacturing down with it.

Ratings agency Fitch changed its outlook on South Africa to negative from stable today, partly due to the impact of the strike. Standard and Poor’s is also expected to adjust its rating after local markets close.

Even if a deal is agreed, platinum producers face renewed financial challenges after suffering huge revenue losses in the strike and with the prospect of paying increased salaries, while restarting mines which have lain dormant for five months.

According to a website run by the three companies, the strike has so far cost them R22 billion in revenue, while workers have lost nearly R10 billion in wages.

“There is no discounting it has been a very damaging strike,” Implats spokesperson Johan Theron told broadcaster SAfm, noting that job losses might follow after a review of the profitability of mines.

“To get all of these workers back through health and safety protocols underground and to fire up all the machinery is an enormous task,” Theron said.

Shares in Anglo American gained 2% this morning, while Impala Platinum rose nearly 1%.

Lonmin, which is the most exposed to the strike, edged up 0.4%, after jumping 9% in the previous session.

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