Tuesday, September 11, 2012

South Africa's Implats details second pay bid by militant labor

JOHANNESBURG (Reuters) - South Africa's Impala Platinum faces a second pay bid from miners equal to an 8-10 percent hike granted in April, the world's No. 2 platinum producer said on Tuesday, and its shares tumbled on the size of the latest demand from militant labor.

Unrest has been sweeping South Africa's bellwether mining sector with a wave of violence that killed 44 people in August, including 34 in a hail of police bullets near the Marikana mine of platinum producer Lonmin.

Implats said on Tuesday the latest pay demand, which it first disclosed last week but did not detail at the time, resembled an 8-10 percent hike dished out five months ago to end a six-week strike.

The company's share price slid over 5 percent on Tuesday as investors digested the scale of the pay hikes being sought, reflecting jitters about high costs and low prices afflicting the industry in Africa's largest economy.

There was no end in sight to the month-long strike that has paralyzed Lonmin after thousands of protesters armed with sticks and machetes marched in a dramatic show of force on Monday, vowing to hunt down and kill strike-breakers.

The few workers who wanted to report for duty at Lonmin's Karee mine on Tuesday were asked to stay away for their own safety as strikers gathered nearby, said Gideon du Plessis, deputy secretary general of the trade union Solidarity.

"The strikers started intimidating people very early this morning and so the area around the Karee mine was declared unsafe," he told Reuters.

Talks to end the impasse looked set to collapse with the independent mediator planning to withdraw at 1000 EDT if the workers had not returned to their shifts by that time.

A precondition for wage negotiations is for workers to return to the posts. If the mediator pulls out, Lonmin will have to deal directly with the workers, who have promised not to return until their demand is met for a more than doubling of their basic monthly wage to 12,500 rand ($1,500).

The platinum sector has been shaken by a bloody turf war between the dominant National Union of Mineworkers (NUM), a longtime political ally of the governing ANC, and the militant Association of Mineworkers and Construction Union (AMCU).

Implats' massive Rustenburg operation, the world's largest platinum mine, was shut for six weeks in January and February amid bloodletting between the unions and an illegal strike.

Now the wage increases approved in April to help resolve that dispute are being demanded again.

"Should this implementation be effected as per the demand, this would equate to a double increase within a period of six months," Implats chief executive Terence Goodlace said.


The labor troubles coincide with simmering discontent over NUM's leadership, which is seen as out of touch and too close to management and the ruling African National Congress, and have now spread to the gold sector.

Around 15,000 workers at Gold Fields remained on an illegal strike at its KDC West mine that started on Sunday night and a company spokesman said their demands had now been tabled.

"We did get written demands. The main one is unhappiness with the NUM branch leadership. They also want 12,500 rand," said Gold Fields spokesman Sven Lunsche.

Gold Fields last week resolved an illegal strike by 12,000 workers at another mine who voiced similar anti-NUM grievances.

South Africa's mining industry is being sucked into a vicious circle as labor unrest spreads with steep wage demands that employers say they can ill afford. [ID:nL6E8K55ZM] Glaring income disparities have driven the labor militancy.

But many platinum shafts are unprofitable and soaring costs mean gold mines will also start losing money in just a few years' time if the precious metal's bull run is not maintained.

The August killings reawakened painful memories of similar incidents under racist apartheid rule, which ended in 1994.

The AMCU's violent rise poses the biggest challenge to the unwritten pact at the heart of the post-apartheid settlement - that unions aligned to the ANC deliver modestly higher wages for workers while ensuring labor stability for big business.

(Editing by Mark Heinrich)

Source: http://news.yahoo.com/south-africas-implats-details-second-pay-bid-militant-115832677--finance.html

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