Business

Amcu kicks off wage talks with 48% platinum pay hike demand

2019-06-17 14:53

The biggest union in the local platinum mining industry has demanded wage increases of as much as 48% from local platinum mines, setting the stage for a tough fight in upcoming pay talks.

The Association of Mineworkers and Construction Union (Amcu) wants minimum basic pay of R17 000 a month, president Joseph Mathunjwa said on Friday.

That compares with about R11 500 earned by the lowest-paid workers now.

The opening salvo – issued to companies including Anglo American Platinum, Sibanye-Stillwater and Impala Platinum – represents a substantial step up from the trade union’s years-long rallying cry for “a living wage” of at least R12 500 a month.

That minimum still hasn’t been achieved at all producers.

The union wants companies to share more of their profits following rallies in the price of palladium and rhodium, which are dug up next to platinum.

A weaker rand has boosted miners’ earnings.

Metal and mining investors will be watching the negotiations closely for any potential strike.

The trade union held the longest platinum mining strike in the country in 2014.

Although today’s demand looks high, it’s not necessarily a harbinger of the final outcome as unions often start off with big asks.

In the last wage round Amcu accepted an increase of 12.5% for the lowest-paid workers, after initially demanding a 47% increment.

MARKET REACTION

The FTSE/JSE Platinum Mining Index pared some of its earlier gains on Friday.

Gold hit a 14-month high and palladium reached its highest price since late March.

“I don’t believe these type of demands are affordable for the industry and would put its sustainability at risk, so it’s unlikely that the platinum group metals producers would accede to these demands,” said Arnold van Graan, an analyst at Nedcor Securities. – Bloomberg

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October 13 2019