South Africa Platinum Miners and Union Finally Seal Pay Deal

(Bloomberg) --

The world’s largest platinum producers sealed a pay agreement with the sector’s biggest labor union in South Africa, concluding negotiations that started in July and putting workers’ remuneration on the back-burner for the next three years.

The agreement between the Association of Mineworkers and Construction Union and Anglo American Platinum Ltd., Impala Platinum Ltd. and Sibanye Gold Ltd. amounts to more than 5.7 billion rand ($386 million) over the course of the 3-year agreement, AMCU President Joseph Mathunjwa said Friday.

The deal gives the companies “breathing space,” according to Peter Major, an analyst at Mergence Corporate Solutions. “This really sets a precedent and shows we are moving into a new era in the mining industry,” he said. “This is the most professional negotiation we’ve ever had these past 25 years.”

Besides giving the companies greater scope to capitalize on a rally in prices ans ensure operational stability, the deal will also calm investor anxiety about a repeat of the crippling industry strike that AMCU led in 2014.

Platinum-group metals are one of the country’s biggest exports and the settlement could boost President Cyril Ramaphosa’s efforts to reboot a stagnating economy and revitalize the mining industry. It also paves the way for Sibanye and Implats to resume dividend payments.

Amplats, the most profitable of the producers, will give its workers an extra 1,000 rand cash in July next year and another 1,500 rand in 2021. Basic pay for workers at Sibanye will rise to as much as 14,700 rand in the third year, from around 12,500 rand now. Implats didn’t disclose further details of the wage agreement.

“It was not an easy journey to engage with these bosses,” said Mathunjwa, who signed the documents on behalf of the union as members sang and chanted.

Sibanye pared gains of as much as 2.1% to 0.3% in Johannesburg, while Implats shares rose as much as 1.4% before trading 0.1% lower. Amplats was down 1.6%.

South Africa Platinum Miners and Union Finally Seal Pay Deal

©2019 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.