Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Amplats offers unions 7 percent wage hike, 'peace' clause

Published 27/10/2016, 11:30
Updated 27/10/2016, 11:30
© Reuters. A pit head is seen at the Tumela platinum Mine , an Anglo American open pit mine Australia's Bheki Msobo (L) plays a shot during the second T20 International  match against South Africa at the  Wanderers Stadium, Johannesburg

By Ed Stoddard

JOHANNESBURG (Reuters) - Anglo American Platinum (J:AMSJ) has tentatively agreed with South African unions to wage increases of at least 7 percent over the next three years to avert a strike, a draft agreement obtained Reuters showed on Thursday.

The draft agreement contains a "peace obligation", which says no members of the unions "shall be entitled to embark upon any industrial action whatsoever".

Members of the biggest union involved, the Association of Mineworkers and Construction Union (AMCU), have embarked on several, often violent, wildcat strikes in recent years.

A source at another South African platinum miner, Impala Platinum (J:IMPJ), said it had offered a similar deal that also included a "peace clause". Implats is only negotiating with AMCU.

"We've learned from the recent past and decided that a peace clause is best practice," the source said.

A union source told Reuters that Lonmin's (L:LMI) (J:LONJ) offer was also similar. A spokeswoman for the company said she could not comment at this stage but said negotiations "have gone well".

The Amplats' draft agreement says 7 percent or 1,000 rand ($72) per month, "whichever is greater". For lower paid-miners earning a base pay of around 8,000 rand a month, this would represent an increase of 12 to 13 percent against an inflation rate currently of 6.1 percent.

But drought has fuelled food price inflation, which was running at 11.3 percent in September, and this in turn impacts wage demands as the average South African miner typically has several dependants he or she needs to feed.

AMCU, known for its militancy and strident tone, had been pushing for wage hikes of close to 50 percent but said last week that it had reached "agreements in principle" with Amplats, Implats and Lonmin .

The union was supposed to have a press conference on Thursday to discuss the details but cancelled it abruptly on Wednesday "due to unforeseen matters".

The union also said last week its members would hold a mass meeting this Sunday to give their final approval. Industry and AMCU sources said the meeting was still expected to take place.

An agreement with Amplats, a unit of Anglo American (L:AAL), is an urgent matter as Sibanye Gold (J:SGLJ) next week takes over its labour-intensive Rustenburg operations, which is where the company's AMCU membership is concentrated.

South Africa's platinum industry is still recovering from a five-month strike that AMCU lead in 2014.

© Reuters. A pit head is seen at the Tumela platinum Mine , an Anglo American open pit mine Australia's Bheki Msobo (L) plays a shot during the second T20 International  match against South Africa at the  Wanderers Stadium, Johannesburg

($1 = 13.8900 rand)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.