Tough times looming in wage negotiations

THE world’s top platinum producers are pleading poverty in advance of South African wage talks set to start in April.

Amplats, Impala Platinum and Lonmin will again be sitting around the table with the hardline Association of Mineworkers and Construction Union (Amcu), which led a five-month strike in 2014.

“The companies are very focused on getting the message across of the dire economic situation that platinum is in,” Chamber of Mines’ chief negotiator Elize Strydom said at a sector indaba in Cape Town yesterday.

“They are really doing a lot of leg work from chief executive level to the investor relations people to share the realities of what is happening in platinum,” she said.

Prices for platinum, used for emissions-capping catalytic converters in vehicles, lost a quarter of their value last year and were down 30% year-on-year at the start of this month.

Underscoring the woes, Amplats reported an 86% drop in full-year profit yesterday.

Lonmin recently had to go back to shareholders for a rights issue to shore up its battered balance sheet.

“The best time to influence the demands is obviously before the negotiations begin to bring some realism into the whole debate,” Strydom said.

The current wage agreements expire in June.

The Chamber of Mines estimates that about 80% of South Africa’s platinum industry is currently loss-making.

The wage talks will involve about 125 000 workers.