South Africa seeks platinum belt peace and wage talks

Marikana, South Africa: South Africa is seeking a “peace accord” in its embattled platinum belt to cool tensions with feuding unions before starting wage talks to end a deadly strike that has paralysed miner Lonmin.

The labour ministry said on Tuesday it aims to seal the peace agreement at a meeting set for Wednesday, yet strikers have dug in their heels, saying they have sacrificed too much to settle for less than their demands of 12,500 rand (Dh5,242) a month.

The strikers are rock driller operators, who the company says are paid about 9,800 rand (Dh4,277) with an average monthly bonus of 1,500 rand (Dh656). The government sees the peace deal as essential after 44 people were killed in the wave of violence around Lonmin’s Marikana mine including 34 striking workers shot by police in the deadliest security action since apartheid ended in 1994.

“If we go back now without getting anything, then it would be like we are selling out,” said Zolisa Bodlani, a representative for the striking workers.

Lonmin said the peace accord meeting was scheduled for Wednesday in the platinum mining city of Rustenburg and would include company management, unions and other representatives from among workers.

Mining operations at Lonmin, the world’s third largest producer of platinum, have been effectively frozen for more than two weeks due to the labour strife. The Marikana mine is about 100 kilometres northwest of Johannesburg.

The violence stems from a bloody turf war spreading through the sector between the dominant National Union of Mineworkers (NUM) and the small but militant Association of Mineworkers and Construction Union (AMCU).

Hundreds of miners gathered on Tuesday near the site of the August 16 police shootings while several armoured police vehicles patrolled the area.

Lonmin said on Tuesday only 8 per cent of its 28,000-strong workforce had reported for duty and there were “unsubstantiated reports” of intimidation at its Karee mine, though no fresh incidents of violence had been reported.

Lonmin accounts for 12 per cent of the global output of platinum, which is used in car catalytic converters and jewellery. It is currently losing about 2,500 ounces a day.

Lonmin has said it may issue new shares to shore up a balance sheet hit by lost output and revenue, and the prospect of further losses as the platinum sector struggles with soaring power and labour costs and poor demand.

The spot price for platinum has gained 9 per cent since the Lonmin strike began but the longer-term outlook is bearish given the weak state of Europe’s auto industry.

South Africa holds about 80 per cent of the known reserves of the precious metal. ($1 = 8.3920 South African rand)