• Connect with us
    • Information
      • About Us
      • Contact Us
      • Careers
      • Partnerships
      • Advertise With Us
      • Authors
      • Browse Topics
      • Events
      • Disclaimer
      • Privacy Policy
    • Australia
      North America
      World
    Login
    Investing News NetworkYour trusted source for investing success
    • North America
      Australia
      World
    • My INN
    Videos
    Companies
    Press Releases
    Private Placements
    SUBSCRIBE
    • Reports & Guides
      • Market Outlook Reports
      • Investing Guides
    • Button
    Resource
    • Precious Metals
    • Battery Metals
    • Base Metals
    • Energy
    • Critical Metals
    Tech
    Life Science
    Precious Metals Market
    Precious Metals News
    Precious Metals Stocks
    • Precious Metals Market
    • Precious Metals News
    • Precious Metals Stocks
    gold investing

    Union Issues Strike Notice to Gold and Platinum Producers in South Africa

    Nicole Rashotte
    Feb. 21, 2019 03:00PM PST
    Precious Metals
    LSE:LMI

    The AMCU has notified six gold and platinum companies that employees will begin striking next week to support Sibanye workers.

    After months of striking led by the Association of Mineworkers and Construction Union (AMCU) at Sibanye-Stillwater’s (NYSE:SBGL,JSE:SGL) South African operations, the union has sent strike action warnings to several other gold and platinum companies in the country.

    The AMCU served a total of six companies, including AngloGold Ashanti (NYSE:AU,OTC Pink:AULGF), Harmony Gold (NYSE:HMY), Anglo American Platinum (JSE:AMS,OTC Pink:AGPPF), Lonmin (LSE:LMI,OTC Pink:LNMIY) Village Main Reef and DRDGold (NYSE:DRD,JSE:DRD), with notice that employees would forego work from Tuesday (February 26) until March 7, in support of colleagues at Sibanye who are striking over wages and job cuts.

    “Secondary strike called by the AMCU [is] not in the best interests of the industry, employees or the country,” the Minerals Council said in a statement on Thursday (February 21).

    Following the news that the AMCU-led strike would encompass several more companies beyond Sibanye, shares of all the miners involved fell by at least 3 percent, with Sibanye dipping almost 2 percent.

    “We have received notice of intended strike action from the union but its membership level at our operations is low. We remain hopeful that common sense will prevail and the strike will be called off but at this juncture, if it happens, we don’t expect major consequences for us. Nevertheless, with our service providers, we are making what seem to us at this time to be sensible contingency plans to manage,” DRDGOLD told the Investing News Network (INN) in a note.

    Despite the AMCU reaching wage agreements with AngloGold, Harmony and Village last year, they believe it is important to strike against these companies in order to further push their concerns around wage and job loss issues at the Sibanye assets.

    “Harmony has engaged with AMCU today to withdraw the strike notice, failing which, the company will approach the Labour Court for an urgent interdict to stop the strike from commencing next Thursday (February 28),” the company said in a note to INN.

    For Lonmin, these strikes threaten the yet-to-be-finalized takeover deal with Sibanye as cutting spending to conserve cash and retain a positive cash balance is one of the main conditions upon which Sibanye’s takeover is contingent.

    “Any disruption is obviously bad news. The deal with Sibanye hasn’t been finalized yet and Sibanye wants Lonmin to be in a cash positive position so obviously if there is a prolonged strike this could affect things,” said Yuen Low, mining analyst at Shore Capital.

    Back in January, Sibanye was hit with a second strike involving its assets in South Africa, as the AMCU added striking at the miner’s platinum mine to the work stoppage already happening at its gold mine. 

    “Although not surprising, the notice for a secondary strike at our South African PGM operations in Rustenburg is disappointing, as all stakeholders will be negatively affected, but more so those employees who will be exposed to the no work, no pay principle,” Neal Froneman, CEO of Sibanye stated at the time.

    In this latest round of strike notices, the AMCU has added that it also intends to strike at Sibanye’s platinum operations for the duration of the protected strike at its gold mines and until the dispute is completely resolved.

    In addition to how the companies involved may be affected, an even bigger issue surrounds how these strikes could hurt the gold and platinum sectors.

    While gold prices are currently rallying, the resource is coming off a particularly rough year and would certainly not benefit from production set backs.

    As for platinum, the results could be far more devastating as South Africa accounts for over 90 percent of the precious metal’s global production and its demand has already been lagging for quite some time.

    At the beginning of February, the Minerals Council of South Africa stated that the sector is in crisis and has struggled with an oversupplied market for the last five years. Minerals Council CEO Roger Baxter also noted that at current prices, more than 60 percent of the platinum mining industry is loss-making or marginal.

    The council noted that current labor strike within the country was one of the factors behind platinum’s continuing problems.

    Instead of ongoing strikes, the council believes that they have come up with a better plan in order to be heard and to turn the platinum industry in South Africa around.

    The Minerals Council spoke to Mineral Resources Minister Gwede Mantashe in order to create a small leadership team with the goal of seeking a co-matching funding to finance both the Platinum Guild International and the World Platinum Investment Council.

    The aspiration the council holds for the platinum group metal industry in the country is that it will establish collaborative partnerships, which will drive demand at industrial, catalytic converter, jewelry and investment levels, with the hopes of increasing yearly revenues to US$50-billion.

    “That would be a significant game-changer for the economy as a whole. By growing the global demand base, we could see a significant change in fortunes,” Baxter noted.

    Don’t forget to follow us @INN_Resource for real-time news updates!

    Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.

    Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

    anglo american platinumharmony goldnyse:aunyse:drdgold investinglse:lmi
    The Conversation (0)

    Go Deeper

    AI Powered

    Platinum Price Unmoved as South African Strikes Enter Week 11

    South African Mining Minister Presents New Offer for PGM Miners to Consider

    Latest News

    Boundiali indicated gold resources grows by 53% in two month

    PGO to Acquire White Dam Gold Operation in South Australia

    Burbanks Drilling Returning Spectacular Grades

    New Drill Targets defined at Mt Hope Project

    Apollo Silver Announces Upsize of Private Placement Offering

    More News

    Outlook Reports world

    Resource
    • Precious Metals
      • Gold
      • Silver
    • Battery Metals
      • Lithium
      • Cobalt
      • Graphite
    • Energy
      • Uranium
      • Oil and Gas
    • Base Metals
      • Copper
      • Nickel
      • Zinc
    • Critical Metals
      • Rare Earths
    • Industrial Metals
    • Agriculture
    Tech
      • Artificial Intelligence
      • Cybersecurity
      • Gaming
      • Cleantech
      • Emerging Tech
    Life Science
      • Biotech
      • Cannabis
      • Psychedelics
      • Pharmaceuticals

    Featured Precious Metals Stocks

    Mount Hope Mining

    MHM:AU

    Walker Lane Resources

    WLR:CC

    Rua Gold

    RUA:CC

    Golconda Gold

    GG:CC

    Falco Resources

    FPC:CC

    Adavale Resources

    ADD:AU
    More featured stocks

    Browse Companies

    Resource
    • Precious Metals
    • Battery Metals
    • Energy
    • Base Metals
    • Critical Metals
    Tech
    Life Science
    MARKETS
    COMMODITIES
    CURRENCIES