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Platinum producers in South Africa could go on strike for the second time in two years if matters surrounding labour issues and higher wages aren’t sorted out.
Platinum mining companies in South Africa are bracing for the second strike in two years if matters surrounding labour issues and higher wages aren’t sorted out.
Union’s wage talks are set to begin this week with Anglo American Platinum (JSE:AMS), Impala Platinum Holdings (JSE:IMP), and Lonmin (LSE:LMI).
The Daily Mail reported that the Association of Mineworkers and Construction Union (AMCU) plans to demand a 50 percent pay increase while a smaller union has asked for 20 percent.
Last week, the AMCU demanded a living wage of $850 per month for its lowest-paid workers, which amounts to a 56 percent increase.
“The living wage addresses food inflation because it keeps rising. If we are stuck in that low wage then how are we going to cope with these increases, which are beyond our control,” AMCU president Joseph Mathunjwa told the Daily Mail.
Negotiations open on Tuesday with Anglo American, Lonmin on Wednesday and Impala on Thursday.
The strike in 2014, led by AMCU, forced major producers, including the ones listed above, to shed 70,000 jobs. The strike lasted almost half a year, and resulted in 1.3 million ounces of lost production, which is a third of global output.
With that in mind, South Africa is the largest producer of platinum. Although prices have gained 22 percent so far this year, overall they are down 50 percent from 2008 due to oversupply and muted demand from China, according to the Daily Mail.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.