South Africa platinum talks remain deadlocked

PRETORIA Mon Jan 27, 2014 12:31pm EST

1 of 5. Mineworkers gather at Wonderkop stadium outside the Lonmin mine in Rustenburg, northwest of Johannesburg January 27, 2014. Government-brokered talks between South Africa's Association of Mineworkers and Construction Union (AMCU) and the world's top three platinum producers began on Monday in a bid to end a strike that has hit half of global output of the precious metal.

Credit: Reuters/Siphiwe Sibeko

Factbox

Related Topics

PRETORIA (Reuters) - Government-brokered talks between South Africa's AMCU union and the world's top three platinum producers ended on Monday with no breakthrough in efforts to end a strike that has hit half of global output of the precious metal.

"They want to sleep on our demands, we are confident that progress will happen tomorrow," Jimmy Gama, the main negotiator for the Association of Mineworkers and Construction (AMCU), told reporters after the talks ended at a Pretoria hotel.

AMCU members downed tools on Thursday at American Platinum, Impala Platinum and Lonmin, bringing operations around the gritty mining town of Rustenburg to a halt and dealing a fresh blow to investor confidence in Africa's largest economy.

Dozens of AMCU activists and shop stewards, clad in their trade-mark green shirts, danced after the talks ended and chanted that the companies were "running back to (President Jacob) Zuma, they have lost the war."

The strikes are an unwelcome distraction for Zuma and his ruling African National Congress (ANC) ahead of general elections expected in three months.

There were no immediate reports of fresh violence on the platinum belt, where dozens of people have been killed over the past two years in a vicious turf war between AMCU and its arch rival the National Union of Mineworkers (NUM).

The negotiations will resume on Tuesday and are scheduled to go on into Wednesday.

LIVING WAGE

Under the populist battle cry of a "living wage", AMCU is demanding minimum entry-level pay of 12,500 rand ($1,100) a month from the three platinum producers - a more than doubling of current levels.

The three platinum producers say they can ill afford such increases as they struggle to recover from a wave of wildcat strikes, rooted in the AMCU/NUM conflict, that battered the sector in 2012.

The companies last week said AMCU's demands were "unaffordable and unrealistic" and have made offers of between 7.5 and 8.5 percent, well above the current inflation rate of 5.4 percent.

AMCU's demands relate to the basic minimum wage for underground workers, which is generally around 5,500 rand a month. But that is not the whole picture.

Aside from the basic wage, companies add benefits such as holiday and accommodation allowances and pension contributions.

Miners may struggle to hold out without pay if the strike becomes protracted. The typical South African mine worker has eight dependants, many of whom are subsistence farmers in rural areas far from the shafts.

This stokes their demands but also means they cannot survive for long without an income. But AMCU has a well-earned reputation for maintaining discipline in its ranks.

($1 = 11.1120 South African rand)

(Additional reporting and writing by Ed Stoddard; Editing by William Hardy)

FILED UNDER: