By Ed Cropley
JOHANNESBURG (Reuters) - The leader of South Africa's AMCU union said on Friday a wage deal with the top three platinum producers was imminent, signalling a possible end to a crippling five-month strike that has disrupted global output of the metal.
Workers from the Association of Mineworkers and Construction Union (AMCU) begged leader Joseph Mathunjwa on Thursday to end the country's longest mining strike and sign the latest offer - an increase of about 20 percent, or 1,000 rand (54.75 pounds) a month.
Mathunjwa told Johannesburg radio he would take the offer to more AMCU members at mines on Friday, before meeting with management at Lonmin, Anglo American Platinum and Impala Platinum later or over the weekend to relay the response of his miners to their offer.
"At least there is light at the end of the tunnel, which is not the light of a goods train," he told Talk Radio 702.
The major outstanding sticking point was whether the wage deal should stretch over three or five years, he said.
"We are in quite a sensitive stage of trying to resolve this and reach an agreement. We won't do things haphazardly," he said.
South Africa is home to 80 percent of the world's known platinum reserves and the strike has halted production at mines that usually account for 40 percent of global output of the precious metal.
Prices of platinum and palladium, which fell nearly 3 percent and 4 percent respectively on Thursday on signs a wage deal may be reached, rebounded from the sell-off on Friday.
The strike by the 70,000 AMCU members began in January and dragged Africa's most advanced economy into contraction in the first quarter. Mining output fell at the steepest rate in half a century, pulling manufacturing down with it and putting the economy at risk of a recession.
When it first downed tools, AMCU said it wanted a roughly 150 percent pay rise to 12,500 rand per month, but platinum companies said this was totally unrealistic and for much of the negotiations said it wouldn't go beyond 10 percent.
"VERY DAMAGING"
Fitch ratings agency changed its outlook on South Africa to negative from stable on Friday, partly due to the impact of the strike. Standard and Poor's is also expected to adjust its rating after local markets close.
Shares in Anglo American gained 1 percent by 0844 GMT, while Impala Platinum rose 0.7 percent.
Lonmin, which is the most exposed to the strike, gained nearly 1 percent, after jumping 9 percent in the previous session.
Even if a deal is agreed, platinum producers face renewed financial challenges after suffering huge revenue losses in the strike and with the prospect of paying increased salaries, while restarting mines that have lain dormant for five months.
"No doubt the strike will have had a negative impact on balance sheets and production," said Peter Leon, mining analyst at Webber Wentzel. "Still, if a deal is agreed, there will be many more positives than negatives."
According to a website run by the three companies, the strike has so far cost them 22 billion rand (1.2 billion pounds) in revenue, while workers have lost nearly 10 billion in wages.
"There is no discounting it has been a very damaging strike," Implats spokesman Johan Theron told state broadcaster SAfm, noting that job losses might follow after a review of the profitability of mines.
"To get all of these workers back through health and safety protocols underground and to fire up all the machinery is an enormous task," Theron said.
The platinum strike also threatens to destabilise labour relations across South Africa as other groups, in particular the NUMSA metalworkers' union, sharpened their rhetoric and pushed for strikes in pursuit of wage increases way above inflation.
"Hopefully a resolution to the platinum strike would cool labour risks elsewhere because a NUMSA strike would be pretty devastating," said Leon at Webber Wentzel.
(Writing by Joe Brock; Editing by Louise Ireland and Susan Fenton)