More mining woes - CNBC Africa

More mining woes


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Chris Bishop

It was a remarkable sight this week; the setting made it more so. It was in the colonial splendour of the Johannesburg Country Club with its manicured lawns and waiters in white jackets - a rare place indeed for a grimy industry to air its dirty linen.

Before us sat the three most powerful people in the utmost lucrative mining business on the planet – and they looked helpless.

Side-by-side sat Chris Griffith, the CEO of Anglo American Platinum, Ben Magara, the CEO of Lonmin, and Terence Goodlace, the CEO of Impala platinum; who all appealed to their workers to return to work for the sake of the industry and the country. All their entreaties were futile and the worst thing was they knew it.

The reason the big three bosses in the platinum industry were down in the mouth was that their mines are bleeding money in a strike over pay that is likely to drag on taking the mines down with it. It has lasted a month and is costing the industry 10,000oz of platinum and about 20 million US dollars at a time when the hard pressed South African mines can ill afford it.

The sad truth is, the platinum mine bosses are at a loss in this dispute, which threatens to be one of the longest in South African mining history. They can’t afford to bleed more money and can do little about it – the union, Association of Mineworkers and Construction Union (AMCU), holds all the cards.

To make matters worse, the two sides are as far apart in this pay dispute as Africa and South America.  AMCU wants more than double the minimum pay in platinum to around 1170 dollars-a-month, while employers are only offering a 9 percent increase. Almost needless to say AMCU has rejected the offer and says it will keep striking until its demands are met.

The platinum mining companies say they can’t afford to pay and warn that shafts will be closed and workers laid off. It is likely to be a long expensive autumn for platinum mining thanks to an ill wind that is unlikely to blow anyone any good.