UPDATE 1-Platinum bosses say "unrealistic" demands behind S.Africa strike

Tue Jan 21, 2014 1:27pm EST

* Company CEOs say demands are "unaffordable"

* Dissidents say many workers oppose strike

* AMCU's Mathunjwa denies cracks in union

* Damaging platinum strike set for Thursday

By Ed Stoddard and Zandi Shabalala

JOHANNESBURG, Jan 21 (Reuters) - Bosses of the world's top three platinum producers accused South Africa's AMCU union of making "unaffordable and unrealistic" demands on Tuesday ahead of a strike this week which could hit over half of global output of the precious metal.

The chief executives of Anglo American Platinum, Impala Platinum and Lonmin made the dramatic warning as signs of some divisions emerged in the hardline Association of Mineworkers and Construction Union, which has called the stoppage for Thursday.

In a rare joint statement that throws down the gauntlet in a bruising standoff between capital and labour, the trio said that "it is of great concern ... that employees are being made promises by AMCU that cannot be delivered upon."

AMCU's charismatic president, Joseph Mathunjwa, is under pressure to deliver on pledges of a "living wage" of 12,500 rand ($1,200) a month, more than double current levels.

The platinum chiefs - Amplats' Chris Griffith, Implats' Terence Goodlace, and Lonmin's Ben Magara - said their wage increase offers ranged from 7.5 to 8.5 percent, well above the current inflation rate of 5.3 percent.

The companies were battered by wildcat strikes in 2012 rooted in a turf war between AMCU and the National Union of Mineworkers (NUM), in which dozens of people were killed.

"In 2012 and 2013, our companies lost a combined 879,400 ounces of production as a result of strike action. This translates into revenue losses of around 12.54 billion rand ($1.15 billion)," the joint statement said.

"Unfortunately these factors led to a reduction in the combined industry workforce from more than 145,000 to less than 134,000 from December 2011 to December 2013. This is a time when the industry can ill afford further losses of production and jobs due to strike action," it said.

NEW RIVAL?

Dissidents in AMCU are forming a rival union, accusing its leadership of recklessly pursuing a damaging strike which they say many miners do not want and cannot afford.

They accuse Mathunjwa of losing touch with rank and file concerns and setting the stage for a protracted strike that will hurt workers who have lost pay to stoppages the past two years.

"Many people don't want to strike," said Thebe Maswabi, a former AMCU shop steward at Amplats who is part of the group that says it plans to form a new union.

Other union sources also say there was a concerted attempt to form a rival to AMCU, which is now the dominant union in the platinum shafts after poaching tens of thousands of NUM members.

"We were approached two weeks ago and asked if we wanted to help register a new trade union and breakaway group," Gideon du Plessis, General Secretary of the trade union Solidarity, which represents mostly skilled workers, told Reuters.

"But we said we don't want to do that and further damage our fragile relationship with AMCU," he said.

Strikers may struggle to hold out as the typical South African mine worker has eight dependants, many of whom live in poor rural areas. This stokes their demands but also means they cannot survive long without an income.

"We are tired of strikes," said Gaddafi Mdoda, one of the leaders of the 2012 strikes.

"If you visit each and every room of the mine workers, the fridges are empty. It's January. Now if they are going to go on strike in February how are they going to start up the year with empty pockets?," he said.

AMCU's leaders deny there are cracks in its ranks and on Sunday it put on a show of force with a rally attended by around 15,000 members who greeted Mathunjwa like a rock star.

"We don't have any disgruntled members in AMCU structures," Mathunjwa said on Tuesday on public broadcaster SABC.

INCREASED MEMBERSHIP

The most recent data shows no sign of AMCU's growth cooling off. In mid-December, figures supplied to Reuters by Amplats showed the union had increased its membership at the company to 60 percent from 40 percent five months before.

AMCU's critics accuse it of using violence and intimidation in pursuit of its agenda and when large numbers of its members gather in their trade-mark green shirts, it is hard to gauge if the support shown is genuine or enforced.

Mathunjwa is also facing scrutiny for recent displays of wealth and power. At Sunday's rally he showed up in a brand new Lexus car with a trio of white bodyguards - an image at odds with his message of black African nationalism and Christian compassion for the poor.

This raises eyebrows as AMCU rose to the top of the platinum belt by exploiting rank and file perceptions that its arch rival NUM had grown too close to management.

"The union leadership needs to understand that they are spending the workers goodwill in a confrontation like this one," said political analyst Nic Borain.

"And that's a currency that is easily devalued if the leadership shows poor judgement and the president drives a Lexus and behaves like a rock star."