UPDATE 3-Implats says prolonged mine outage would hit profit

Wed May 23, 2012 11:26am EDT

Related Topics

* 3,000 ounces in platinum output lost per day

* Company says unions in "winner take all" fight

* Mine was shut for 6 weeks earlier this year (Adds company statement, latest prices)

By Sherilee Lakmidas and Ed Stoddard

JOHANNESBURG, May 23 (Reuters) - A prolonged shutdown of the world's largest platinum mine due to an ongoing union turf war could hit the profits of owner Impala Platinum, the company warned as 3,000 ounces of output was lost for the second day running.

Implats said in a statement on Wednesday afternoon that it was confident the workers would return for their shifts at the Rustenburg mine soon, though an extended disruption would impact its bottom line.

"The work stoppage if protracted will impact our near term profitability as well as the number of jobs we can sustain in the future," the company said.

Implats said that because the stoppage was seen as illegal, no one would be paid for time missed.

"The rival unions are still playing a game of winner takes all. This should not be a fight to the death," Johan Theron, Implats head of human resources, had told Reuters earlier on Wednesday.

The fresh flare-up buries hopes of settling a labour battle that shut the Rustenburg mine, which accounts for about 15 percent of global output, for six weeks earlier this year. That cost Implats 120,000 lost ounces.

But markets took the fresh unrest in stride. Spot platinum fell to a 4-1/2 month low with the focus on the gloomy demand outlook.

SHOOTING TRIGGER

Rustenburg, Implats' flagship South African mine, has been hit by clashes between the dominant National Union of Mineworkers (NUM) and the Association of Mineworkers and Construction Union (AMCU).

The latest round was sparked when police say suspected AMCU supporters allegedly shot and wounded a NUM member last week. Their arrest on Monday prompted protests, which saw most of the mine's workforce failing to report for duty on Tuesday.

"This action has resulted in the majority of the mining workforce embarking on an unprotected work stoppage in support of their colleagues and a refusal to return to work until they have been released. The striking workers are preventing employees who wish to work from doing so," Implats said.

Theron said the AMCU, which has launched a recruiting drive, wanted recognition from the company and now claimed to have 10,000 members or about a third of the 30,000-strong labour force if processing workers are counted.

He said about a third of the workers were not union members so if the AMCU's claims were true, its numbers at the operation would now roughly rival the NUM's.

Theron said the company planned to conduct an audit of the workforce and if this was true, it would have to renegotiate its "majority union" agreement there with the NUM.

The stakes are high as the AMCU is widely regarded to be more radical than the NUM, which has managed to consistently secure above-inflation wage increases for its members.

Platinum miners negotiate their own contracts with workers, making them more vulnerable to recruitment drives from upstart unions than their gold or coal counterparts, which do so collectively as an industry through the country's Chamber of Mines.

Implats' recognition could embolden the AMCU to take the NUM on at other companies, stoking tensions on South Africa's combustible labour front.

Implats' share price was down 3.50 percent in late Johannesburg trade, in line with the sector which was hammered by the falling spot price. (Editing by Hans-Juergen Peters)

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