South African union pushing for huge pay increase

July 3, 2013

South Africa’s Association of Mineworkers and Construction Union (AMCU) will likely set the tone for salary demands across the countries platinum mining sector with a demand to Anglo American Platinum that the company more than double the monthly pay of underground workers to 12,500 rand ($1,300), according to a document seen by Reuters.

AMCU has emerged as the dominant union on the platinum belt after a violent turf war last year with the National Union of Mineworkers (NUM) in which more than 50 people were killed.

Its first wage submission to platinum producers is likely to set the tone for salary demands across a sector still reeling from the unrest, which cost billions of dollars in lost output and led to credit downgrades for Africa’s largest economy.

Replicating demands submitted to gold producers at the end of June, AMCU said that “on a daily basis workers experience a declining standard of living and the dream of sharing in the wealth of the country remains a pipe dream.

“We believe therefore that the minerals of this country must now benefit the people,” it said in the preamble.

The world’s top platinum producer, a unit of Anglo American, is likely to oppose big hikes as it struggles to return its mines to profit after drops in the spot platinum price squeezed margins and forced it consider closing some shafts.

Amplats plans to cut 6,000 South African mining jobs and reduce platinum production by 10 percent, or 250,000 oz, this year, with another 100,000 oz to go in the medium term.

The demand for an entry-level wage of 12,500 rand for underground workers is much higher than the slightly-above-inflation increase reached between NUM and Aquarius Platinum last month.

 

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