* Producers to go directly to striking miners
* AMCU says rebuffed by "platinum cartel"
* Amplats reduces production guidance for 2014
* Painful restructuring seen after strike ends
(Updates with AMCU response)
By Ed Stoddard
JOHANNESBURG, April 24 Major platinum producers
in South Africa said on Thursday they would take their latest
wage offer directly to employees, after they failed to reach a
deal to end a 13-week strike with the Association of Mineworkers
and Construction Union (AMCU).
The move marks a dramatic escalation in the longest and most
damaging strike in South Africa's mines in living memory,
setting the next stage in a grinding war of attrition between
capital and labour on the platinum belt.
"(We) advise that, unfortunately, no resolution has yet been
achieved in resolving the three-month strike relating to wages
and benefit," Anglo American Platinum, Impala Platinum
and Lonmin said in a joint statement.
"The producers have a duty to provide the details of the
settlement offer to our employees and will do so forthwith."
AMCU said it in a statement it planned to address its
members about the unfolding situation in mass meetings, saying
it had been "arrogantly rebuffed by the platinum cartel".
"We were extremely livid at these underhanded methods. It is
difficult to predict how our members will react and what mandate
they will give us faced with this situation," it said.
The producers are forcing the hand of AMCU and its president
Joseph Mathunjwa by betting that most of the strikers have lost
their resolve to strike as they face the third consecutive month
The companies can go directly to the workers through a
number of avenues including by mobile phone text messages, a
method they have been using to communicate with them throughout
"They will get the offer detail from us. They will be able
to consider the offer and indicate to their union whether they
are happy to return or not," Implats spokesman Johan Theron told
"Failing the above, they will be able to tell us whether
they are ready to accept or not. On this basis we could then
take a decision to re-open the mine and allow workers to return
on the basis that they enter into an individual agreement with
the employer," he said.
AMCU for its part will try and rally its rank and file
through its trade-mark mass meetings.
There is potential for violence given AMCU's recent history.
It emerged as the top union in the platinum shafts in 2012 after
poaching tens of thousands of members from the once-unrivalled
National Union of Mineworkers (NUM) in a turf war that killed
dozens of people.
The union and producers had spent the past three days
haggling over an offer tabled last week by the companies.
Underscoring the widening impact of the stoppage, Amplats
said it now expected full-year output to be 2.1 million ounces,
down from its previous estimate of 2.3 million to 2.4 million.
There is "potential for further downside revisions from the
ongoing industrial action", the unit of global mining house
Anglo American said in a trading update.
A painful restructuring is considered likely after the dust
clears from the strike, with job losses expected, especially
around Amplats' struggling Rustenburg operations, which it has
signalled it could sell or mothball.
The strike, which started exactly 13 weeks ago, has hit
about 40 percent of global production with more than 700,000
ounces lost so far.
Even if the strike were to end next week, production losses
will still mount as the mines slowly reboot.
"Based on the extent of direct losses from strike action
to-date, and adding in an allowance for lower production as a
result of safe-start procedures, re-hiring, re-training and
ramp-ups, I expect losses to platinum production this year to be
in the order of 900,000 to 1 million ounces," said William
Tankard, metals analyst at Thomson Reuters GFMS.
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.
Spot platinum prices are near $1,400 an ounce, around
3.5 percent lower than just before the walkout began on Jan. 23.
The sector's viability is also being shaken. Producers have
lost 14.5 billion rand ($1.4 billion) to the strike so far,
according to an industry website that gives a running tally (here).
These factors plus rising costs explain why the producers
have been trying to draw a line in the sand, setting the stage
for a protracted showdown.
Mathunjwa has cast the strike in class-war terms and says
his union aims to rectify decades of exploitation of black
labour by white capital.
Initially demanding an immediate doubling of the basic wage
- net salary before allowances such as housing - for entry-level
workers to 12,500 rand 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 rises of up to 10 percent and other increases that would
take the minimum pay package - the basic wage including the
allowances - to 12,500 rand a month by July 2017.
(Editing by David Evans and Keiron Henderson)