Friday, September 28, 2012

Amplats Workers Remain Defiant in Wildcat Strike

Striking Amplats miners in South Africa defiant

9:49am EDT
By Agnieszka Flak

RUSTENBURG, South Africa (Reuters) - South African miners on an illegal strike against the world's top platinum producer defied management threats of dismissal on Friday, throwing down the gauntlet as another wildcat stoppage hit the country's restive mining sector.

Anglo American Platinum (Amplats), the top producer of the white metal and a unit of global mining group Anglo American, said on Thursday it would begin disciplinary action against illegal strikers and could fire them.

Four of Amplats' Rustenburg mines, accounting for a quarter of group output, have been idle for more than two weeks, costing the company at least 20,000 ounces in lost output to date - $33 million at current spot prices.

A wave of illegal mine strikes is roiling Africa's biggest economy despite the end of a bloody six-week stoppage at another platinum producer, Lonmin, in which 46 people were killed.

Spot platinum was up 1.4 percent at $1,665.74 an ounce, on track for a 15.4 percent quarterly rise.

Amplats said it would send text messages telling employees to get back to work.

In the shantytowns ringing the platinum belt city of Rustenburg, 120 km (70 miles) northwest of Johannesburg, workers said they were prepared to stand their ground.

"Management is sending us SMSs telling us that they will fire us, but they are lying. Too much depends on these mines," said Siphamandla Malchanya, a machine operator with four children.

"I'm not educated, my father was not educated, but my kids must be educated. They must not face the same problems I'm facing. We are prepared to die for this situation. We will not go underground unless they put an offer on the table."

According to the text message seen by Reuters, Amplats is telling workers to attend a hearing on Tuesday to argue why they should not be fired for taking part in an illegal strike.

"Should you not make any representations, a decision will be made in your absence," the messages says.

Anglo American launched a review of its Amplats operations months ago as margins shrank in the face of soaring costs and weak demand.

But for workers such as Malchanya, with several dependents and rising food costs, talk of profit margins is academic, especially after Lonmin's workers secured hikes of up to 22 percent after their violent standoff.

"We'll not accept that miners at Lonmin can get 22 pct and we get nothing. If the company says it is losing billions from the few days we had been on strike, then I can't accept that we only get 5,500 rand ($670) a month," he said.

The ripples from the Lonmin settlement showed no signs of slowing the spread of discord through the sector, as junior gold producer Village Main Reef said 1,700 workers at its Blyvoor operation had downed tools on Friday in an illegal strike.

Close to 75,000 workers are on strike or being prevented from going to work in South African mines, including at operations run by the world's third- and fourth-biggest bullion producers, AngloGold Ashanti and Gold Fields.


Impala Platinum, the world No. 2 producer of the metal used in vehicle catalytic converters, offered a pay hike this week to head off a possible strike.

"The overriding imperative ... should be to ensure peace, stability and order and in so doing create an environment for safe production. The wage adjustment supports this imperative," chief executive Terence Goodlace said in a statement.

An illegal stoppage at Implats would have brought the labor unrest full circle this year. Its Rustenburg operation, the world's largest platinum mine, was brought to a halt for six weeks in January and February amid a bloody union turf war between the militant Association of Mineworkers and Construction Union (AMCU) and the dominant National Union of Mineworkers.

Implats has said the hikes will add about 5 percent to its wage bill but has not given exact numbers.

The wider impact of the strikes hit home on Thursday when Moody's cut South Africa's credit rating by one notch, citing the government's inability to tackle socio-economic challenges.

(Writing by Ed Stoddard; Editing by Ed Cropley and Jason Webb)

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