24 January 2014

South Africa: Platinum Mines Not Making Money - Implats

Johannesburg — Most platinum mines in South Africa are not making any money and cannot afford to pay workers R12,500, Impala Platinum (Implats) told SAfm in an interview on Friday.

"Business is struggling quite clearly. Most [platinum] mines in South Africa are not making any money," Implats spokesman Johan Theron told the broadcaster.

"If you look at Impala, our wage bill is R7 billion, so a 10-odd percent increase is an extra R700m which simply we don't have."

He said the company was trying to discuss with the unions involved in the platinum sector strike on how to help them improve profitability.

"The conversation we are trying to have with unions is how do we work together to improve profitability so that we can make some of these demands affordable and I think that's what we should be focusing on."

A strike by the Association of Mineworkers and Construction Union at Impala, Lonmin and Anglo American platinum entered its second day on Friday.

Workers are pushing for an entry-level monthly salary of R12,500.

The strike would continue during a meeting between the labour department, the mining companies and Amcu at the Commission for Conciliation, Mediation and Arbitration in Johannesburg.

Lonmin CEO Ben Magara told SAfm the company had been negotiating with the union since October.

"We have not found an answer, we have not found each other. The employees have chosen to strike because it's their right."

"They [the unions] are hoping to shake the tree and hoping something will come down."

Magara said the demands from Amcu was more than R12,500.

"It is a challenge for us, the industry cannot afford it. We have offered between eight and 8.5 percent," he said.

On rand value, the minimum salaries were around R5800 and R6000, which would an eight percent increase, he said.

"This is about three percent higher than the current inflation in the country," said Magara.

"We are challenged... We are hoping we find a solution."

Asked about their strong share price, Magara said the longterm fundamentals of platinum remained attractive and robust.

"The reality is today we are not there yet, we are not delivering where we need it to be...We have to look at all the challenges and create profitable businesses."

He said no one was benefiting from the strike,

"Every week that we lose, is two percent of their salary (our employees)...We are encouraged by the meeting we are going into now," Magara said.

Theron said Amcu's demands were detailed on five pages. The R12,500 was just one demand, he said.

Ads by Google

Copyright © 2014 South African Press Association. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.