24th Jun 2014 13:26
LONDON (Alliance News) - Lonmin PLC and Anglo American Platinum Ltd, a subsidiary of Anglo American PLC, said on Tuesday that they have settled their dispute with the Association of Mineworkers and Construction Union in South Africa, ending five months of crippling strike action.
The companies said that the dispute over wages and conditions were settled under a new three-year agreement which should see employees return to work on Wednesday.
"The signing of today's agreement brings to an end the extreme hardship suffered by all stakeholders, the country, our communities, suppliers and in particular our employees, over the last five months. We believe that signing this agreement with our majority union is the only way forward in re-building our business," Lonmin Chief Executive Ben Magara said in a statement.
Under the new deal, Lonmin said its lowest underground basic salary will increase by ZAR1,000 per month for each year of the deal, while employees in its C-band group would receive wage increases of 8% in year 1 and 7.5% in years 2 and 3.
The company also said that all employees will receive, within 7 working days, certain back payments due to them from their 2013 increase date of October 1 until January 22 this year, the day before the strikes began.
Anglo American said it has provided similar terms. It said that the AMCU has agreed not to undertake any strikes related to any of the items covered by the wage agreement for the three year duration of the agreement.
Both companies said that returning to pre-strike levels of production will take time despite processing facilities restarting in May. They added that restructuring and productivity improvements are needed in order to curb certain cost inflation pressures.
"The protracted strike has underlined broader issues facing the industry, its workforce and mining communities. We are committed to working with stakeholders to find solutions to address these issues and to deliver sustainable benefit for all involved," Anglo American Platinum Chief Executive Chris Griffith said in a statement.
The news comes after AMCU president Joseph Mathunjwa addressed thousands of miners at a mass meeting at the Royal Bafokeng Stadium in Rustenburg on Monday, saying that they would accept wage offers from the producers on Tuesday and the striking workers should return to work on Wednesday, according to Reuters.
"Today we are creating a historic day in the mining sector," Mathunjwa told the crowd, according to the newswire. "The platinum sector will never be the same. What other unions have failed to do over many years, you have achieved in five months."
On June 12, Lonmin, Anglo American Platinum, and Impala Platinum Holding Ltd, said that the two sides had reached "informal undertakings" in principle on a potential deal.
However, last Wednesday, Lonmin said that it had "regrettably" received new demands from the AMCU that, if granted, would mean significant additional costs of over ZAR200 million for the company above the increased costs contained in an in principle deal the sides agreed.
The strikes, which began on January 23, have cost mining companies over ZAR24 billion, according to the companies. Striking miners, meanwhile, are believed to have missed out on over ZAR10.5 billion in wages.
Lonmin shares were down 1.7% to 255.1 pence, while Anglo American shares were down 0.3% to 1,466.5 pence on Tuesday.
By Tom McIvor; [email protected]; @TomMcIvor1
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Anglo AmericanLonmin