Amcu president Joseph Mathunjwa. Picture: REUTERS
Amcu president Joseph Mathunjwa. Picture: REUTERS

The Association of Mineworkers and Construction Union (Amcu) is demanding R17,000 a month per miner in the platinum sector, as wage talks with the biggest producers start, prompting an angry response from Sibanye-Stillwater.

Amcu, which has used R12,500/month as its rallying call since 2012 when it rose to prominence in the platinum industry, has adjusted its base demand to R17,000/month because of inflation, said the union’s president, Joseph Mathunjwa. The average basic wage for the lowest earners in the platinum industry is R11,500 a month

Amcu’s demands include provisions around housing, provident funds, transport, medical aids and other issues, which Mathunjwa said will amount to a total demand of R30,000 per worker. “This is a drop in the ocean compared to what CEOs earn per hour,” he said, adding that Amcu represents about 60,000 workers in the platinum wage talks.

Mathunjwa noted the strong increase in palladium and rhodium prices since 2017 at a media briefing ahead of the start of wage talks with Sibanye-Stillwater, Anglo American Platinum and Impala Platinum, SA’s three largest platinum group metal producers.

“It’s high time the bosses share their hyper-profits with the workers who are toiling every day,” he said.

An analyst described Amcu’s opening demands as the “usual opening gambit” and that there was unlikely to be a major strike because platinum miners are making good bonuses in the prevailing price environment.

Singling out Sibanye, the world's biggest platinum miner, and its CEO, Neal Froneman, after the futile five-month wage strike by Amcu at the company’s gold division, Mathunjwa said Froneman had boasted about how the platinum division in the company was protecting the company from the gold strike.

The analyst said the outcome of the failed gold strike, which left more than 14,000 Amcu members in severe financial difficulties, would have been closely monitored by their peers in the platinum sector, again, dimming the appetite for a protracted strike.

Mathunjwa and Amcu brought SA’s platinum mines around the Rustenburg area to a complete stop in a five-month wage strike in 2014, taking more than 1-million ounces of platinum out of the market.

Mathunjwa also noted the more than R3bn Sibanye raised during the gold strike, asking Froneman to use that to increase platinum miners’ salaries.

Sibanye immediately dismissed Amcu’s demands as “impractical and unaffordable”. 

‘Significant losses’

“The claim that the platinum group metals (PGM) industry has been experiencing a boom is recent years is fallacious,” said Sibanye spokesperson James Wellsted. “The platinum price is actually at its lowest since just after the global financial crisis and it is only in the past eight months that the basket price, driven by palladium and rhodium, and a weaker rand has exceeded industry costs.” 

A basket price is the total average price achieved for each ounce of the PGMs a company sells, with palladium and rhodium, which are mainly used in automotive catalytic devices in engine exhaust systems, the stand-out performers.

“For years prior to this, the industry has made significant losses and has had to curtail capital investment in order to survive, with many jobs having been lost as a result,” Wellsted said. “With unavoidable cost pressures already coming from spiraling electricity costs from Eskom, excessive demands of this nature will threaten the future of the industry and with it many more jobs.”

Sibanye has taken over Lonmin in a R4bn all-share deal. Amcu is by far the largest union at the Lonmin mines and fiercely opposed the takeover, contesting it every step of the way, going as far as appealing against the Competition Tribunal’s conditional approval of the transaction.

“Amcu’s opposition meant we delayed the transaction by 13 months,” Mathunjwa said, noting the action had saved thousands of workers’ positions and kept their salaries intact for that period. The opposition to the merger cost Amcu R3m, he said.

When the deal was unveiled in December 2017, Lonmin said it would have to cut 12,500 jobs over three years. The competition authorities put a six-month moratorium on job cuts once the takeover was completed.

Froneman has said the improved PGM prices since the deal was announced could mean there would be reduced job cuts and slower action around closing marginal Lonmin shafts.

Mathunjwa gave no further details of other demands Amcu, the largest union in the platinum sector, is making in wage talks.

Updated: June 14 2019
This article has been updated with responses from Sibanye-Stillwater and a mining sector analyst.