MARIKANA, South Africa (Reuters) - Striking platinum miners at Lonmin’s LONJ.J LMI.L Marikana mine in South Africa accepted a hefty pay rise offer on Tuesday, ending six weeks of violent labor unrest that killed 45 people and rattled Africa’s largest economy.
The strikers, grouped on a bare soccer pitch near the mine, 100 km (60 miles) northwest of Johannesburg, cheered when they were told that management were offering a 22 percent pay increase, and said they would return to work on Thursday.
“I am happy - and forward with the struggle,” said one of the striking miners, Sithembile Sohati.
“It’s a huge achievement. No union has achieved a 22 percent increase before,” Zolisa Bodlani, a worker representative at Marikana, told Reuters.
At least one analyst expressed concern that the Marikana wage increase could trigger a rash of pay demands across a mining sector already being squeezed by low metals prices and rising labor and electricity costs.
Lonmin confirmed that the deal had been signed in Rustenburg on Tuesday night.
“The agreement includes a signing bonus of 2,000 rand and an average rise in wages of between 11 and 22 percent for all employees falling within the Category 3-8 bargaining units, effective from 1 October 2012,” it said in a statement.
In another sign that weeks of trouble in South Africa’s platinum belt were ending, the world’s biggest platinum producer, Anglo American Platinum (AMSJ.J), said it had resumed operations in the strike-hit Rustenburg area.
The spot platinum price fell 2 percent on the Marikana news to $1,627.49/oz and the rand firmed over 1 percent to 8.166 to the dollar.
The wildcat mining strikes hitting a major sector of the economy had depressed the rand, increased the cost of insuring against default on South African debt and spooked some foreign investors into selling mining shares.
The conflict, most notably the police killing of 34 Marikana strikers on August 16, had also ignited criticism that President Jacob Zuma and his ruling African National Congress were neglecting poor workers and siding with wealthy business owners.
Zuma acknowledged that the wildcat industrial action had caught the government and powerful allies such as the National Union of Mineworkers (NUM) on the hop.
“This incident has been a surprise given the established procedures we have in place,” he told reporters in Brussels minutes after news of the settlement.
The deal will see wages raised by up to 22 percent depending on the category of worker but that percentage hike is not across the board, according to the Solidarity trade union of skilled workers which was not on strike but took part in the talks.
The rock drill operators who began the strike will receive an effective 22 percent rise on their total package including allowances which will bring it to just over 11,000 rand per month, Solidarity said.
“The key worry now is that 22 percent wage rises will be seen spreading across the mine industry. That is hardly affordable in an industry with such hefty cost pressures already,” said Peter Attard-Montalto, emerging market economist at Nomura International.
Marikana strikers’ representative Bodlani said the workers had asked Lonmin management to promise that they would work with unions to reach within two years the 12,500 rand ($1,500) basic monthly salary that the miners had originally demanded.
The company has not yet responded to this. It had previously argued that paying 12,500 rand a month would put thousands of jobs at risk and challenge the viability of the business.
In its statement, Amplats said it considered it was now safe for employees to return to their jobs but acknowledged that “many mining employees are still to return to work”.
It said smelting and other processing operations at Rustenburg were already at normal levels.
Amplats suspended operations in the heart of the platinum belt last week when machete-wielding strikers marched on shafts.
The Marikana police shootings were the deadliest security incident since the end of white minority rule in 1994 and, for many South Africans, painfully recalled security force massacres of black demonstrators under apartheid.
In all, 45 people died in the Marikana unrest, which spread beyond Lonmin to other platinum firms around Rustenburg and some gold mines.
ANC renegade Julius Malema, who was expelled from the party for indiscipline this year, has used the Marikana unrest to relaunch his political career and stir up opposition against Zuma ahead of an ANC leadership election in December.
Malema was barred by police on Monday from addressing the striking miners at Marikana, but said his campaign to improve workers’ pay and conditions would not be cowed by a government crackdown.
“Not even the president can stop me. Not even death can stop me. My ideas are out there. Even if I am no more, people will continue those ideas,” he told a news conference.
South Africa is home to 80 percent of all known reserves of platinum and is a major gold producer. The unrest this year has cost the mining industry 4.5 billion rand ($548 million) in lost output, Zuma said on Monday.
An illegal strike by 15,000 workers at the KDC West mine operated by Gold Fields (GFIJ.J), the world’s fourth largest bullion producer, continued on Tuesday as its chief executive said the firm would not agree to demands for a minimum wage of 12,500 rand a month.
In a separate development, parliament approved a 5.5 percent pay increase for Zuma on Tuesday, taking his annual remuneration to 2.6 million rand ($315,600) a year.
($1 = 8.2075 South African rand)
Additional reporting by Agnieszka Flak, Sherilee Lakmidas, Ed Cropley and Ed Stoddard; Writing by Pascal Fletcher; Editing by Ed Cropley and Kevin Liffey