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UPDATE 1-Lanxess signs deal with S.African miners to end strike
May 24, 2013 / 4:11 PM / in 5 years

UPDATE 1-Lanxess signs deal with S.African miners to end strike

* Union ends walkout after winning one-off payment

* Wage talks cast shadow on troubled platinum belt

* Union threaten to halt production at VW plant (Adds details on labour tensions, threat to VW plant)

By Agnieszka Flak

JOHANNESBURG, May 24 (Reuters) - Striking South African workers at a chrome mine owned by German chemicals group Lanxess have signed a deal to end a week-long illegal walkout, after winning a one-off payment from the latest company to give in to militant labour pressure.

The dispute at the mine in Rustenburg, 120 km (70 miles) northwest of Johannesburg, added to long-running friction in the so-called platinum belt that has caused mining production to slow, raised concerns about Africa’s largest economy and sent the rand to four-year lows.

“All parties agreed on a one-off performance payment,” Lanxess said in a statement on Friday. “Employees are expected to resume work on Monday.”

An offer by platinum producer Lonmin to give overall pay increases of up to 22 percent to end more than five weeks of crippling and bloody industrial action last year prompted similar wildcat strikes across the sector and beyond.

The Rustenburg area, home to 80 percent of known global platinum reserves, has become the flashpoint of violent labour strife and a turf war between the politically connected National Union of Mineworkers (NUM) and the militant Association of Mineworkers and Construction Union (AMCU).

More than 50 people have been killed in labour violence since last year while several major platinum and gold mines have had to suspend operations due to wildcat strikes.

Labour leaders have threatened more strikes to protest against plans by the world’s largest producer of the white metal, Anglo American Platinum, to cut 6,000 mining jobs. The figure is less than half the 14,000 the company initially targeted.

The company began on Friday the formal and lengthy lay-off process, which included talks coordinated by South Africa’s industrial arbitration body, the Commission for Conciliation Mediation and Arbitration (CCMA).

Upcoming wage talks across the economy are expected to be tough given inflation, rising worker militancy, shrinking company margins and sharply falling commodity prices.

Employers blame an uncompetitive, low-skill, high-wage economy with restrictive labour laws for keeping unemployment high. Since 2000, real after-inflation wages in South Africa have risen 53 percent, while productivity has fallen 41 percent.

The NUM has demanded wage hikes of up to 60 percent from gold and coal employers, well above the inflation rate of about 6 percent.

President Jacob Zuma’s ruling African National Congress (ANC) has been in a long-standing governing alliance with labour groups such as NUM, with cabinet members this week attacking AMCU for poaching members from its labour ally.

In a separate labour dispute, the National Union of Metal Workers of South Africa (NUMSA) on Friday threatened to “halt production” at a Volkswagen factory to protest against the dismissal of it its members.

NUMSA, also part of a labour federation that supports the ANC, has demanded a 20 percent pay hike for its workers at state power utility Eskom. (Additonal reporting by Tiisetso Motsoeneng; Editing by Jon Herskovitz and Mark Potter)

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