Voice of America (Washington, DC)

23 June 2014

South Africa Platinum Mine Strike 'Officially Over'

Photo: Sapa
Armoured police patrol near Lonmin's Marikana mine (file photo).

South Africa's AMCU union declared a five-month platinum strike "officially over" on Monday as thousands of miners roared their approval when leader Joseph Mathunjwa asked if they wanted to end the longest work stoppage in the country's history.

The South African Press Association on Monday quoted Mathunjwa as saying a deal with platinum-producing companies will be signed on Tuesday and workers will return to work by Wednesday.

"The strike is officially over," Mathunjwa said, to unrestrained jubilation from the tens of thousands of workers packed into Rustenburg's Royal Bafokeng Stadium, one of the venues for the 2010 soccer World Cup.

The companies - Lonmin, Impala Platinum and Anglo American Platinum - estimate the strike has cost several billion dollars in lost earnings for workers as well as company revenue, the Associated Press reported.

When the strike began Jan. 23, 70,000 workers put down their tools to demand higher wages and benefits.

The industry is a pillar of the struggling South African economy.

Markets react to news

On reports of the news, the spot price of platinum fell 1 percent, the rand firmed nearly 1 percent against the dollar to two-week highs and the London-listed shares of number three producer Lonmin rose as much as 7 percent.

The precious metal's two biggest producers, Anglo American Platinum and Impala Platinum, are listed on the Johannesburg stock market. It had closed by the time Mathunjwa finished his two-hour-long speech, but their shares closed up 1.6 percent and 1.1 percent respectively.

Industry sources said they could not confirm signings would take place on Tuesday but expected workers to return this week, Reuters reported.

"I'm very glad the strike is over, because we made a terrible wound in the South African economy and we are happy to heal that wound. Our children are suffering because they had no food," Lucas Makgwe, a miner at Amplats told Reuters.

Mathunjwa, a Salvation Army lay preacher who casts himself as a class warrior doing battle for downtrodden black miners whose lives have changed little in the 20 years since apartheid ended, was exultant.

"Today we are creating a historic day in the mining sector," Mathunjwa, clad in a trademark AMCU green shirt, told the crowd.

"The platinum sector will never be the same. What other unions have failed to do over many years, you have achieved in five months," he said.

Mathunjwa said "companies agreed to the bulk of our demands," although "it has not been easy."

He acknowledged that not all workers would obtain their wage demand of 12,500 rand (850 euros, $1,150) a month in three years but added that "many will easily reach it" within this period, the French news agency AFP reported.

The increases offered by the three companies differ according to various worker categories.

The current minimum wage stands at about 5,000 rand.

The mining companies, constrained by depressed prices and soaring costs, had said the massive hikes AMCU was initially seeking would sink the industry.

Strike cost billions

There was no immediate reaction from the producers, who said earlier that "further progress towards a return to work has been made" but gave no details, simply stating they were expecting to receive feedback from AMCU after the meeting.

Marred at times by violence, the strike hit 40 percent of global production of platinum, which is used in jewelry and for emissions-capping catalytic converters in automobiles.

The stoppage dragged Africa's most advanced economy into contraction in the first quarter and cost the companies almost 24 billion rand ($2.25 billion) in lost revenue, according to an online tally run by the three firms.

Companies will lose revenue for several more weeks as the mines slowly grind back into life and production is restarted.

The resolution, while welcome, does not spell an end to the most turbulent bout of labor unrest since the end of white-minority rule, with the NUMSA metal workers' union threatening a strike in the auto industry next month.

The platinum sector also faces a painful restructuring, with job cuts almost inevitable - in part because of the losses incurred during the AMCU strike. That could trigger a further wave of walkouts or violence.

South Africa is a major producer of platinum, which is used in medical, electronic and other industries.

Meanwhile, the country's labor court has declared unlawful a planned gold mining strike by the same union, AMCU, gold producers said Monday.

Some information for this report provided by Reuters, AFP and AP.

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InFocus

South African Miners' Strike Settled

Armoured police patrol near Lonmin's Marikana mine (file photo).

South African platinum miners have returned to work after reaching a pay agreement which ended a five-month-long strike. Read more »