JOHANNESBURG/LONDON – Government-mediated talks began on Thursday in a bid to find a solution to an 18-week platinum strike in South Africa that threatens to push the continent’s most advanced economy into recession.
The talks, at an undisclosed location, were put together by new mines minister Ngoako Ramatlhodi after they stalled on Wednesday. A spokesperson for the producers said they had started.
They bring together government officials and the striking Association of Mineworkers and Construction Union (AMCU) and the world’s top platinum producers, Anglo American Platinum, Impala Platinum and Lonmin.
“We will participate positively and with an open mind,” AMCU president Joseph Mathunjwa told local radio station Power FM on Thursday morning.
South Africa’s finance minister said on Thursday that ending the strike is critical and that all sides must realise its impact on the economy.
Implats’ spokesman Johan Theron said his company had full confidence the government team would make headway.
It remained unclear where the talks would go after the government team, which includes officials from the Treasury, wrapped up its work on Thursday.
The stakes are high, a point underscored by an Implats’ presentation to analysts on Wednesday, in which it said it is currently burning cash at a rate of R400-million ($38-million) a month at its affected operations.
While finding a negotiated settlement with South Africa’s main mining union is first prize, the world’s second-largest platinum producer said it would explore five strategies should the talks remain deadlocked.
One of these options would include the long-term shutdown of the strike-affected mines, the company executives team told analysts in a roundtable on Wednesday.
A painful restructuring is seen across the industry, with expected sales, closures or job cuts widely expected at Amplats’ operations around Rustenburg.
The strike has cost producers 20-billion rand to date in lost revenue and is the main reason behind the shrinkage of South Africa’s economy in the first quarter of this year.
It has also been descending into violence, with five miners murdered on the platinum belt this month in mine-related violence, and so the government is keen bring it to an end.
The two sides remain far apart on the issue of wages.
The companies have offered pay increases of up to 10%, which would raise the overall minimum pay package to R12 500 ($1 200) a month by July 2017, including the basic wage plus cash allowances for necessities such as housing.
The producers say they can afford no more, squeezed on one side by soaring costs and on the other by low prices.
AMCU, whose battle cry has its demand for “a living wage”, has said that the companies’ offer is not enough and has focused the attention of its members on the basic wage, which excludes allowances. It wants that figure to be 12,500 rand in three or four years’ time.