Foreign Correspondence

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South African miners strike deal with Lonmin bosses .. [ embedded video and others ]

"Lonmin, the world's third-largest platinum producer, is able to give its chief executive an annual pay
package equivalent to what the average rock-drill operator would take home after 400 years on the job."

Striking platinum mine workers have reached a deal with Lonmin's management that includes a 22% pay rise and a single payment of $250 to cover wages lost during the strike, negotiators said Tuesday. The miners are set to return to work on Thursday.

South African media on Wednesday hailed the end to a wildcat strike at world number three platinum producer Lonmin which killed 45, but warned the 22-percent wage hike deal set a dangerous precedent in the sector.

"The end of the Lonmin strike is something we should all cheer, but how the dispute has been settled may provide a template for workers to use elsewhere. That's the contagion threat," a columnist for Business Day wrote, taking a bitter-sweet tone on the end of the five-week standoff.

Workers at London-listed Lonmin's Marikana mine on Tuesday agreed to return to work Thursday after the company upped their salaries by 22 percent, with a $245 one-off bonus.

Mediators claimed this was the highest raise ever negotiated in the country's labour history.

Illegal strikes spread to other platinum and gold mines in the country following the start of the industrial action at Lonmin on August 10, where police shot dead 34 people.

The business daily said other miners may not stand down until their wages are raised in a similar way.

This threatened to destabilise the entire mining industry, which accounts for a fifth of Africa's largest economy.

"What started as a wage dispute... has morphed into something much bigger, posing a number of questions about the future of the mining industry and SA as an investment case."

"Workers at other mines may be encouraged to adopt the same tactics as the Lonmin workers, especially as they managed to winkle out extra pay from a struggling company."

The Star newspaper reported "this could be bad news for the biggest miners' union in the country, the National Union of Mineworkers (NUM)."

The paper speculated that members of the affiliate of the country's powerful union federation Cosatu -- which is in alliance with the ruling African National Congress -- would abandon NUM.

"There is a strong feeling that NUM members will decamp and move to join the Association of Mineworkers and Construction Union (AMCU), the NUM's new rival," it reported.

AMCU has been accused of precipitating the wildcat strikes with unrealistic salary promises to prospective members.

Meanwhile online news site the Daily Maverick wondered over the backroom politics that brought about the deal.

"Even as workers prepare to return to work, questions are now being asked
about what exactly happened six weeks into the strike to facilitate the agreement."

http://www.france24.com/en/20120918-south-african-miners-reach-deal-lonmin-bosses-management-pay-rise-platinum

======== .. meanwhile ..

UPDATE 2-S.Africa mine bosses talk tough with strikers

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By Ed Stoddard

JOHANNESBURG, Oct 1 (Reuters) - Top global platinum producer Anglo American Platinum (Amplats) said on Monday it would fire all strikers who did not attend disciplinary hearings the following day as an illegal strike continued at 4 of its South African mines.

With no end in sight to a spate of wildcat strikes in South Africa, AngloGold Ashanti warned that an illegal stoppage could lead to cuts in its operations there and said it might also have to fire workers.

Amid the tough talk from mining bosses, another illegal strike broke out on Monday at the Bokoni platinum mine run by Amplats and Canadian-based Atlatsa Resources.

The Bokoni strike is worrying because it is in the far eastern limb of the platinum belt, hundreds of kilometres from the wave of labour strife centred around the cities of Rustenburg and Marikana, where 46 people were killed in a bloody 6-week stoppage at Lonmin.

Police said on Monday another body had been found in the Rustenburg area near an Amplats property and they believed the death was related to the mine violence.

Amplats' four Rustenburg mines have been shut for over 2 weeks at a cost of over 20,000 ounces in lost output and the company will now sack employees who do not report to disciplinary hearings by Tuesday.

"The company will be left with no alternative but to dismiss, in their absence, all employees who do not present themselves," it said in a statement.

In total, there are around 75,000 miners on strike across South Africa's gold and platinum sectors, about 15 percent of the underground labour force. Virtually all of the strikes are illegal.

The chief executive of AngloGold, the world's third largest gold producer, issued a stern warning on Monday about the viability of its South African operations and said the illegal strike by 24,000 of its 35,000 workers could lead to dismissals.

"If the current unprotected strike continues, it compounds risks of a premature downsizing of AngloGold Ashanti's South African operations," Mark Cutifani told a briefing that was webcast to employees.

He added the company could take action, potentially including dismissals, against striking employees.

Cutifani also said there were no immediate plans to scale back on 4.5 billion rand ($540.91 million) in capital investment plans in South Africa this year but the country was becoming a tough sell to investors.

"If we don't resolve the issue then how do I justify to shareholders that we should continue to invest in South Africa," he said.

UNCLEAR DEMANDS

Cutifani also said the demands being made were unclear.

"It's mainly about money, but when you ask people what does that look like, they are unable to tell you," Cutifani told Reuters.

He said it could be 16,000 rand a month or 18,000 rand but the demands did not specify if this was across the board or a basic wage or included the whole package. "It's just a number. We don't even know what that means."

AngloGold's South African operations accounted for 32 percent of the group's production in the first half of 2012 and the company said it was losing around 32,000 ounces of production a week due to the strike.

Gold mining in South Africa is generally on the decline as resources mined for decades run out and shafts have to sink deeper to get to the ore, raising costs.

Labour violence first erupted on South Africa's platinum belt as a turf war between the militant Association of Mineworkers and Construction Union (AMCU) and the dominant National Union of Mineworkers.

Fueled by glaring income disparities, the strikes have hit also hit AngloGold's rival Gold Fields and smaller mining operations.

http://www.reuters.com/article/2012/10/01/safrica-mines-idUSL6E8L1GC220121001