South African platinum talks resume as miners prepare for mass meeting

Wed Apr 23, 2014 2:57am EDT

* Strike has cost industry $1.4 bln in lost revenue

* Platinum price remains depressed despite strike

* Miners get ready for mass meeting - AMCU official

By Ed Stoddard

JOHANNESBURG, April 23 (Reuters) - Talks aimed at ending a crippling three-month strike in South Africa's platinum sector resume on Wednesday after the world's top producers and union AMCU spent Tuesday haggling over an offer tabled last week by the companies.

The strike is already the longest and most costly for South Africa's mines in living memory but in recent days there has been a renewed drive to break the deadlock after several weeks with no formal direct talks between the two sides.

"The meeting is on," an industry source told Reuters. The talks involve the Association of Mineworkers and Construction Union (AMCU) leadership and the chief executives of Anglo American Platinum, Impala Platinum and Lonmin .

No talks are scheduled after Wednesday.

About 70,000 members of the hardline AMCU downed tools 13 weeks ago at the three companies' mines, hitting 40 percent of global production of the metal used for emissions-capping catalytic converters in cars.

Initially demanding an immediate doubling of the basic wage - net salary before allowances such as housing - for entry-level workers to 12,500 rand ($1,200) a month, AMCU has since said it would accept annual increases that would reach this goal in three or even four years' time.

The producers' latest offer, made last Thursday, was for wage hikes of up to 10 percent and other increases which would take the minimum pay package - the basic wage including the allowances - to 12,500 rand a month by July 2017.

The companies are struggling to maintain margins in the face of steeply rising costs on one hand and depressed prices on the other for platinum and say they cannot afford any more.

Even if AMCU brings an offer to its members the strike will not end until votes are taken at mass meetings in the platinum belt northwest of Johannesburg. This process may take days.

"We have been told to prepare for a central mass meeting this week, it may take place on Saturday," Siphamandla Makhanya, an AMCU shop steward, told Reuters.

That may involve bringing thousands of miners back from their rural homes in places such as the Eastern Cape province hundreds of kilometers (miles) from the shafts. Many have returned to their villages and families to sit the strike out.

Exacerbating the industry's woes is the muted price reaction to the stoppage despite its scale. Traders have bet there are adequate above-ground stocks and demand remains far from robust in major markets such as Europe, where diesel engines which require high platinum content in converters are favoured.

Spot platinum prices are about $1,400.00 an ounce, about 3.5 percent lower than just before the walk out which began on Jan. 23.

The sector's viability is also being shaken. Producers have lost 14.4 billion rand ($1.4 billion) to the strike so far, according to an industry website which constantly updates the tally (here).

The talks are being facilitated by the country's department of labour but there has been little direct political intervention to resolve the dispute even though it is a headache for President Jacob Zuma and the ruling ANC with a general election looming on May 7. ($1 = 10.5448 South African rand) (Editing by Louise Ireland)