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Specter of strike action returns to South Africa as unions kick off 2016 platinum wage demands

The Association of Mineworkers and Construction Union, thebiggest trade union for South African platinum miners, has renewed its call fora 12,500 South African rand minimum wage for platinum miners, sparking fears ofa return to the kind of strike action that devastated the industry in 2014.

The AMCU July 6 sent new wage demands to the three mainplatinum companies in the country — Lonmin Plc, Anglo American Platinum Ltd. and ,demanding a 12,500 rand basic salary for the lowest-paid workers.

The union also demanded wage increases for higher-paidworkers, a five-day working week for miners, food and transport allowances,double rates of pay for Sunday work, and danger pay for underground workers.

The existing pay deal in the platinum sector expired at theend of June.

The union's new set of demands have set the scene for abattle between workers and mining companies, who claim low platinum prices andhigh costs render the pay demands unrealistic.

Industry pundits are also concerned about signs of growingcompetition between the more militant, socialist-leaning AMCU, and the AfricanNational Congress-affiliated National Union of Miners, which is demanding amore modest 20% wage increase, according to South African newspaper Business Day.

Both organizations have been competing for members, often bypromising to reap higher and higher wages from mining companies. The rivalry isso fierce that members of the two unions fought outside Northam Platinum Ltd.'s Zondereinde mine in early June.

But the AMCU appears to have gained the most so far. Itsmembership has grown to approximately 180,000 members, while NUM's membershipfell to 195,000, from 310,000 in 2012. AMCU is particularly dominant inplatinum, it now represents about 80% of miners in that sector.

The AMCU-led strikes in 2014 paralyzed production in SouthAfrica's platinum sector, as mines in the country went idle for over fivemonths, costing the sector about 24 billion rand in lost revenues.

Miners at thetime claimed the wage demands could bankrupt miners already underpressure from falling platinum prices and rising electricity costs in thecountry.

Unions eventually agreed to smaller pay rises of up to 20%annually.