Strike may force Northam Platinum to cut jobs – CEO

2013-11-25 11:10

Northam Platinum may be forced to cut jobs after losing more than R200 million during a three-week strike over pay, it said in a letter to workers.

Northam is losing R14 million a day in revenue, excluding costs, as a result of the strike at its Zondereinde division that began November 3, it said in an open letter to the National Union of Mineworkers, published today in Business Day.

The company has offered workers pay increases of 8% to 9%, it said.

“Northam itself is in a tenuous position,” chief executive officer Glyn Lewis and general manager Danny Gonsalves said in the letter.

“A higher cost base would reduce the company’s profitability, which is already strained by weak economic fundamentals, and will – ultimately – affect jobs.”

The NUM, which represents about 80% of employees in two bargaining unit categories, has demanded an average pay increase of 61%.

The outcome of the Northam strike will set a precedent for wage negotiations at larger producers Anglo American Platinum, Impala Platinum and Lonmin, according to Investec and Stanlib Asset Management.

Northam is aiming not to cut jobs as part of a settlement, it said.

“Unlike other miners, Northam has not yet retrenched employees as a means of containing costs and we would hope to continue on that track,” it said in the letter, addressed to NUM General Secretary Frans Baleni.

The letter is an insincere gesture because the first time he read it was in the newspaper, Baleni said in an interview. “They plead poverty, but executives continue to earn huge salaries,” he said. “Only one side must tighten their belts and that’s the workers.”

The strike will continue and about 5 000 miners will march to Northam’s offices in Johannesburg tomorrow, Baleni said.

The impact of the strike on the workforce and communities “is likely to be significant,” Northam said, as striking workers have so far lost R30 million in wages. Employees who strike do not get paid in South Africa. With each worker supporting between five and 10 people, about 70 000 people are potentially without income, Northam said.

The company has revised its wage proposal three times and is offering to pay entry-level employees between R10 200 and R10 600 a month, excluding bonuses and allowances.

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