23rd Jan 2014 10:56
LONDON (Alliance News) - South Africa's platinum sector is first to be hit by strike action announced on Monday, as employees from Lonmin PLC and Anglo American Platinum Ltd have downed tools Thursday.
The major platinum producers said that the strike is only legal for the Association of Mineworkers and Construction Union members, and those in other unions were not allowed to picket.
The South African AMCU announced its plans to strike on Monday, demanding a ZAR12,500 minimum wage for entry-level workers and better working conditions.
Both companies said the South African no-work, no-pay principle will apply to all employees who are absent from work Thursday.
Anglo American said it has recorded low attendance at its Rustenburg, Union and Amandelbult mines following the initiation of industrial action this morning and expects production to be impacted by the strike action.
Anglo American Platinum fired over 12,000 striking South African Miners in October 2012, after strikes over pay and working conditions shut four of the firm's five mines in the Rustenburg area, costing Amplats production of 39,000 ounces of platinum worth GBP51 million, according to the company at the time.
Anglo American PLC is the largest shareholder in Anglo American Platinum Ltd, which separated from the major metals producer in 1995.
Lonmin said it expects losses to be in the region of 3,100 platinum ounces per day during the strike and will make further announcements on the impact of the action shortly.
In 2012, 34 miners were shot dead by police during an illegal strike backed by AMCU at Lonmin's Marikana mine. Ten other people, including miners, police officers and security guards, were killed in the preceding week.
This time, the strike is within a framework agreement signed by the government, unions and mining companies, a spokesman for Deputy President Kgalema Motlanthe was quoted by SAPA as saying.
The government, which was criticized over the Marikana massacre and is keen to avoid further labour unrest ahead of April elections, has tried to mediate in the current dispute.
AMCU replaced the National Union of Mineworkers as the biggest platinum trade union during the Marikana protests. Miners have criticized the NUM as being too close to business and the government.
AMCU also had planned a strike at gold mines, but that was put on hold after a ruling on an application to prevent it was postponed by a Johannesburg court.
Both company's said they will work together with a government set up mediation process in order to find a resolution to the action.
Lonmin shares were down 0.1% to 321.40 pence and Anglo American shares were up 0.9% to 1,379.00 pence Thursday.
By Tom McIvor; [email protected]; @TomMcIvor1
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