Platinum miners in South Africa are bracing for a tough round of talks to negotiate a three-year wage deal.
Already, tensions are high over this meeting, which could lead to the labour unions going on strike. More worrisome is that the strike could send platinum prices soaring.
This sit-down with the world’s biggest miners is seen as important, as it is also an early test case for Cyril Ramaphosa’s new presidency.
An amicable outcome will be good for Ramaphosa, a former union leader and one-time platinum company investor, as he seeks to lure foreign investors.
The Association of Mineworkers and Construction Union, AMCU, the largest and most militant labour organization in the sector, is expected to push for higher wages as the industry reaps windfall profits.
According to the spokesperson for Impala Platinum Holdings Ltd, Johan Theron, preliminary wage talks should begin this month. Negotiations are expected to pit AMCU and three other labour unions against at least, seven producers, including Anglo American Platinum Ltd.
Across the negotiating table, some producers have accumulated cash to withstand a repeat of the prolonged and violent strike in 2014.
South Africa produces about 70% of the world’s supply and has 80% of the world’s platinum reserves.
The market is controlled primarily by three companies; Anglo American Platinum (Amplats), Impala Platinum (Implats), and Lonmin.
