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AMCU, NUM ready for platinum wage talks in South Africa

The South African platinum sectors' two biggest unions — the Association of Mineworkers and Construction Union and the National Union of Mineworkers — said that they are ready for wage talks that are due to begin in earnest in the third week of June, S&P Global Market Intelligence was told.

When the last three-year-wage deal was negotiated in 2014, AMCU members from Anglo American Platinum Ltd., Impala Platinum Holdings Ltd. and Lonmin PLC, embarked on a five-month strike, the longest in the history of South African mining. The second-longest strike, at Sibanye Gold Ltd.'s mining operations, was also by AMCU. In the case of the gold strike, AMCU refused a settlement offer that was accepted by UASA, Solidarity and NUM.

Unlike gold miners, which pursue collective bargaining headed by the Mineral Resources Council of South Africa, negotiations in the platinum sector are conducted on a company-by-company basis.

AMCU president Joseph Mathunjwa, speaking to S&P Global Market Intelligence, said the union had completed consultation with its members and would hand over its wage demands to mining employers next week after reviewing the demands from branches.

NUM, the sector's second largest labor union, said it has started negotiations with Implats, African Rainbow Minerals Ltd.'s Modikwa, and Petra Diamonds Ltd.'s Cullinan and Finsch operations, and was in the process of concluding a settlement with Siyanda Resources Pty Ltd.'s Siyanda Bakgatla. NUM deputy secretary general William Mabapa said the union was finalizing its submission to Sibanye, which has recently merged with Lonmin.

Meanwhile, relations between Sibanye and AMCU, the biggest union in the sector, are already strained as a result of an extended legal battle in which the labor union lost its bid to have the merger with Lonmin overturned on the grounds that it would result in at least 13,000 job losses. The companies successfully denied that the bulk of the job losses were merger related.

The platinum sector wage negotiations are generally completed by October, but Mabapa said NUM wants its negotiations completed by the end of July.

"Our expectation is that this is not going to be a long negotiation, there must be mature discussion on both sides so we resolve any disputes as soon as possible," he told S&P Global Market Intelligence. "Increases must be through by July 31 at the latest."

The platinum price, years in the doldrums, have recently improved, offering stronger returns for mining companies.