South Africa mediator resumes talks with striking platinum union

JOHANNESBURG Wed Mar 26, 2014 1:01pm EDT

A member of trade union AMCU sings as he arrives for the start of a march to the Union Buildings in Pretoria, March 6, 2014. REUTERS/Mike Hutchings

A member of trade union AMCU sings as he arrives for the start of a march to the Union Buildings in Pretoria, March 6, 2014.

Credit: Reuters/Mike Hutchings

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JOHANNESBURG (Reuters) - South Africa's government mediator met with the striking Association of Mineworkers and Construction Union (AMCU) on Wednesday to restart talks aimed at ending a crippling platinum strike now entering its tenth week.

The Commission for Conciliation, Mediation and Arbitration said in a statement it would separately meet companies Anglo American Platinum, Impala Platinum and Lonmin this week, but industry sources said as of late Wednesday no date for that meeting had been set.

Crucially, there are still no scheduled face-to-face talks between the two sides and the Lonmin chief executive told staff to take voluntary leave, as there appears to be no end in sight to the strike that has cut 40 percent of global platinum output.

"Unfortunately, the strike looks set to continue despite our best efforts to seek a solution with AMCU," Ben Magara said in an internal staff memo dated March 25 and seen by Reuters.

"We have to make tough decisions to preserve and protect the business by reducing costs and conserving cash," Magara said in the memo. "As a first step, we will approach employees to voluntarily take any leave owing to them."

Asking employees to take paid leave now is a signal Lonmin hopes to make up for at least some of the lost production, possibly by working through the Christmas break, when South Africa's mining industry traditionally halts and most workers take their vacation.

Talks collapsed three weeks ago with the two sides poles apart on the issue of wages.

AMCU earlier in March softened its stance for the first time, saying it wanted staggered increases to bring the basic entry wage to 12,500 rand ($1,200) a month in three years' time, instead of immediately.

That would be more than double current amounts. The companies are offering increases of up to 9 percent, setting the stage for a protracted and grinding showdown between capital and labor on the platinum belt northwest of Johannesburg.

ALMOST $1 BLN AND COUNTING

The trio of producers has lost 10.2 billion rand ($950 million) and counting in revenue, while 4.5 billion rand in employee earnings are gone, according to an industry website that updates the losses. (here).

No other single mining strike in South Africa has approached this scale since the end of apartheid in 1994. Economists say it has already hobbled sluggish growth in Africa's top economy and dealt a fresh blow to the country's reputation with investors.

For President Jacob Zuma and his ruling African National Congress party, it is an unwelcome distraction with general elections looming on May 7.

And "strike fatigue" appears to be setting in among miners, many of whom have dependants and who this week will have missed their second consecutive monthly pay cheque.

"If the companies move, we are prepared to take 8,000 rand a month for now. That is the mandate we have given our leaders," an AMCU member with Implats told Reuters on Wednesday.

That would still be a raise of more than 30 percent and it is doubtful the companies will come close to entertaining this notion when about half of the country's shafts were not making money before the strike, according to the industry.

AMCU leaders were not immediately available for comment.

But the union plans to march to Implats' office in Johannesburg on Thursday, a sign that it is not backing down as it usually uses such events as a show of force and to rally its rank and file around the cause.

Other unions say AMCU members tired of the strike are trying to leave the union.

"We have had guys lining up at our offices at Lonmin saying they want to leave AMCU to join us because they are tired of the strike," said Gideon du Plessis, general secretary of the Solidarity Trade Union, which represents mostly skilled workers.

"But we have told them that won't end the stoppage and they need to go to their leaders in AMCU and give them a different mandate," he told Reuters.

($1 = 10.7657 South African rand)

(Editing by David Dolan, Keiron Henderson and Dale Hudson)

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