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South Africa Miners Return to Work After Longest Platinum Strike

  • Reuters

Mineworkers queue for check-ins near Lonmin's Marikana platinum mine before returning to work, June 25, 2014.

Mineworkers queue for check-ins near Lonmin's Marikana platinum mine before returning to work, June 25, 2014.

Tens of thousands of South African platinum miners returned to work on Wednesday after wage deals ended the longest and most damaging strike in the country's history.

The five-month strike hit 40 percent of global production of the precious metal and has cost companies Lonmin, Anglo American Platinum and Impala Platinum a combined 24 billion rand ($2.25 billion) in lost revenue.

A supervisor at the Marikana operations of London-listed Lonmin told Reuters it could be a week or more before any workers went back underground. A return to full production could still take three months.

Industry and union officials said miners were streaming back to work and Reuters reporters saw thousands trudging to Marikana before sunrise on a cold winter's morning.

“Viva AMCU! Viva Lonmin!” one worker shouted on his way to a Lonmin processing plant. Miners in a bus danced and sang in jubilation as it drove up to the gates.

Lonmin had set up huge canvas tents in a nearby stadium where miners underwent medical and other checks.

Calling for a “living wage” for its members, many of whom live in poverty, the Association of Mineworkers and Construction Union (AMCU) had demanded an immediate doubling of basic wages to 12,500 rand ($1,200) a month.

In the end, it settled for raises of up to around 20 percent annually.

The companies will find even that increase hard to absorb. Around half of the country's platinum shafts were already losing money before the strike.

Lonmin, the smallest of the three producers, said restructuring was “inevitable” to ensure the business remained afloat, especially while industrial demand for platinum in vehicle catalytic converters remains subdued.

Around 1.2 million ounces of production have been lost to date, according to Reuters calculations based on the companies' estimated loss of 10,000 ounces a day. The industry usually works for 11 days out of 14.

But the strike had little impact on the spot price of platinum, underscoring the challenges facing the sector.

AMCU is sure to oppose any restructuring proposals that include job cuts.

Lay-offs are a thorny issue in South Africa, which has an unemployment rate of close to 25 percent and glaring income disparities. AMCU members have gone on wildcat strikes in the past to protest at planned job losses at Amplats.

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