* End to five-month platinum strike may be in sight
* Striking miners begged AMCU leader to sign wage deal
* Mediator says mood among miners is "jubilant"
* Platinum producers face huge financial challenges
(Adds mediator, investor, analyst, updates markets, changes
By Ed Cropley
JOHANNESBURG, June 13 The leader of South
Africa's AMCU union said on Friday a wage deal with the top
three platinum producers was imminent, signalling a possible end
to a crippling five-month strike that has disrupted global
output of the metal.
Workers from the Association of Mineworkers and Construction
Union (AMCU) begged leader Joseph Mathunjwa on Thursday to end
the country's longest mining strike and sign the latest offer -
an increase of about 20 percent, or 1,000 rand ($93) a month.
Mathunjwa told Johannesburg radio he would take the offer to
more AMCU members at mines on Friday, before meeting with
management at Lonmin , Anglo American Platinum
and Impala Platinum later or over the weekend
to relay the response of his miners to their offer.
"At least there is light at the end of the tunnel, which is
not the light of a goods train," he told Talk Radio 702.
The main outstanding sticking point was whether the wage
deal should stretch over three or five years, he said.
"We are in quite a sensitive stage of trying to resolve this
and reach an agreement. We won't do things haphazardly," he
Bishop Joe Seoka, who mediated between miners, companies and
the government after the police killing in August 2012 of 34
wildcat AMCU strikers, said communities around the Rustenburg
mines in the platinum belt, made desperate by the strike, were
"The mood is very jubilant. People are very happy, very
excited," he told Reuters.
"Yesterday I could have flown if I'd had wings. If it hadn't
happened yesterday, it could never have happened."
Investec Asset Management, a top 10 investor in all three
mining companies, said a deal would end a worrying period of
uncertainty but the industry faced major challenges.
"We are not out of the woods yet," Hanré Rossouw, Cape Town-
based head of resources at Investec, told Reuters.
"There are still some hard questions to be asked about
ongoing sustainability of the industry. A large part of the
industry is not generating positive returns," he said.
South Africa is home to 80 percent of the world's known
platinum reserves and the strike has halted production at mines
that usually account for 40 percent of global output of the
The cut in production has helped push global palladium
prices up 15 percent this year, and platinum prices
up 6 percent, but both have seen bouts of heavy selling
over the past two days on signs of a wage deal.
The strike by the 70,000 AMCU members began in January and
dragged Africa's most advanced economy into contraction in the
first quarter. Mining output fell at the steepest rate in nearly
50 years, pulling manufacturing down with it and putting the
economy at risk of a recession.
Fitch ratings agency changed its outlook on South Africa to
negative from stable on Friday, partly due to the impact of the
strike. Standard and Poor's is also expected to adjust its
rating after local markets close.
When it first downed tools, AMCU said it wanted a roughly
150 percent pay rise to 12,500 rand per month, but platinum
companies said this was totally unrealistic and for much of the
negotiations said it wouldn't go beyond 10 percent.
Even if a deal is now agreed, platinum producers face
renewed financial challenges after suffering huge revenue losses
in the strike and with the prospect of paying increased
salaries, while restarting mines that have lain dormant for five
According to a website run by the three companies, the
strike has so far cost them 22 billion rand ($2.05 billion) in
revenue, while workers have lost nearly 10 billion in wages.
"The mining companies are in a very difficult place, they
are not a juicy investment," said Peter Major, mining analyst at
Cadiz Asset Management.
"The companies are saying: 'we will worry about when we are
going to pay them later. We just want this thing over'."
Shares in Anglo American were up 1.7 percent by 1243 GMT on
Friday, while Impala Platinum rose 1.2 percent.
Lonmin, which is the most exposed to the strike, eased 0.7
percent, after jumping 9 percent in the previous session.
The platinum strike also threatens to destabilise labour
relations across South Africa as other groups, in particular the
NUMSA metalworkers' union, sharpened their rhetoric and pushed
for strikes in pursuit of wage increases way above inflation.
"Hopefully a resolution to the platinum strike would cool
labour risks elsewhere because a NUMSA strike would be pretty
devastating," said Peter Leon, mining analyst at Webber Wentzel.
($1 = 10.6945 South African rand)
(Additional reporting by Tiisetso Motsoeneng and Zandi
Shabalala; Writing by Joe Brock; Editing by Louise Ireland and