Five-month strike comes in an end

June 23, 2014

The five-month long labor strike that crippled South Africa’s platinum mining sector came to an end on Monday when South Africa's main platinum mining union announced that its members agreed to a wage settlement.

The Wall Street Journal reported that the agreement is for less than the union demanded (nearly triple the pay of all worker’s entry-level salaries), but that worker’s but will still get an annual increase annual pay by around 1,000 rand ($94) a month for a three-year period.

Association of Mineworkers and Construction Union (AMCU) president Joseph Mathunjwa told several thousand striking workers gathered in a stadium in Rustenburg, northwest of Johannesburg and in the heart of the platinum mining region of the agreement that was reached. He said the agreement will be for three years starting retroactively from 2013, instead of the five the companies had wanted. Mr. Mathunjwa told the crowd that the union plans to sign the agreement on Tuesday and that mine workers can begin returning to work starting Wednesday.

The agreement will apply only to members of the AMCU, which accounts for roughly 80 percent of employees at the main platinum companies.
The strike by roughly 70,000 platinum workers wrought massive damage — to the bottom lines of companies, to the lives of workers and to South Africa's fragile economy. Platinum producers said they lost more than $2 billion in revenue since the strike started, while workers lost nearly $1 billion in unpaid salaries. The country's economy shrank 0.6 percent in the first quarter from a year earlier, the first quarterly contraction since 2009.

The more lasting damage could be to South Africa's labor environment. The strike highlighted the fractious relationship between companies and a union leadership that is looking to expand beyond the platinum sector to gold and automobile components. Those developments could spell trouble for a government looking to attract foreign investment to revive a flagging economy.

The strike was led by the ACMU, which has grown rapidly by promising higher payouts than its rival, the National Union of Mineworkers. The AMCU was behind the mine strikes in August 2012, when 34 protesters were killed after police fired live ammunition into a crowd. In the final weeks of the latest strike, four mine workers and the wife of one were killed. One was hacked to death, two were strangled and one died when his shack was set on fire. Mine workers not a part of the strike say intimidation was rampant.

During the lengthy on-and-off talks in the platinum sector, the AMCU stood firmly behind its demand to nearly triple entry-level wages from 5,000 rand to 12,500 rand a month, rarely capitulating to company and government demands.

The platinum companies have said that given the length of the strike they could be forced to restructure their mines and cut jobs.


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