South Africa Union Rejects Implats, Sibanye’s Wage Offers
South Africa's AMCU Union Says Sibanye is Provoking a Strike
(Bloomberg) -- South Africa’s largest platinum-mining union has rejected initial wage offers from two of the world’s biggest producers and accused Sibanye Gold Ltd. of trying to provoke a strike. Sibanye’s shares plunged.
The Association of Mineworkers and Construction Union said its members turned down opening proposals from Impala Platinum Holdings Ltd and Sibanye. The workers haven’t met to decide on a response to Anglo American Platinum Ltd., the union said.
Union President Joseph Mathunjwa also issued a stern warning to Sibanye, which became the largest platinum miner after its acquisition of Lonmin Plc in May this year. Sibanye offered substantially less for workers at the former Lonmin operations than at its other mines.
“It is an insult to workers and we believe Sibanye is trying to provoke us into a strike,” Mathunjwa said. “Workers will respond accordingly because they are being taken for a ride.” Still, he noted that negotiations are ongoing at all three companies, so it’s too early to make a decision about any strike action.
In 2014, AMCU led the longest-ever platinum mining strike in the country, costing the sector about $2 billion in revenue.
| Offered increase in rand for categories A,B | Year 1 | Year 2 | Year 3 |
|---|---|---|---|
| Anglo Platinum | 1,000 | 800 | 800 |
| Sibanye (Lonmin mines) | 300 | 350 | 400 |
| Sibanye (other) | 700 | 700 | 800 |
| Implats | 800 | 800 | 800 |
AMCU’s demands aren’t viable, Sibanye spokesman James Wellsted said. Lonmin’s former mines aren’t making money and AMCU’s demands would have “negative consequences for jobs and for local communities,” he said. “The offer we have made reflects the current financial and operating position at the Marikana operations.”
Implats hasn’t yet received formal feedback from the union on its wage offer, said Johan Theron, the company’s spokesman. Negotiating teams from Implats and AMCU are meeting over the coming days, he added.
Sibanye slumped as much as 14%, the most since April. Implats shares declined as much as 4.5% and Amplats fell as much as 4.4%.
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AMCU’s comments are contributing to nervousness on South African platinum-mining stocks, said Rene Hochreiter, analyst at Noah Capital Markets Ltd.
“The union’s fears are more particularly on Sibanye,” Hochreiter said. “If they are offering less than half of what everyone else is offering, Sibanye may have a bit of a problem.”
To contact the reporters on this story: Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net;Felix Njini in Johannesburg at fnjini@bloomberg.net
To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Liezel Hill, Lynn Thomasson
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