News / Economy

South Africa's AMCU to Strike at World's Top Platinum Producers

Joseph Mathunjwa (R), president of South Africa's Association of Mineworkers and Construction Union (AMCU), arrives to address members of the mining community during a rally in Rustenburg, northwest of Johannesburg, Jan.19, 2014.
Joseph Mathunjwa (R), president of South Africa's Association of Mineworkers and Construction Union (AMCU), arrives to address members of the mining community during a rally in Rustenburg, northwest of Johannesburg, Jan.19, 2014.
Reuters
The main trade union for South African platinum miners will strike next week at the world's top three producers, hitting over half of global output and the margins of companies struggling to make profits.
    
A simultaneous stoppage at the three producers would hit a key South African export at a time when the rand currency is near five-year lows, and deal a fresh blow to investor confidence in Africa's biggest economy.
    
Renewed labor unrest would also be an unwelcome distraction for President Jacob Zuma and his ruling African National Congress (ANC) ahead of general elections expected in three months.
    
Members of South Africa's Association of Mineworkers and Construction Union (AMCU) voted overwhelmingly on Sunday to strike at world No. 1 producer Anglo American Platinum (Amplats) in a show of hands in a stadium in the platinum belt city of Rustenburg.
    
Around 15,000 miners had piled into the stadium in a display of force ahead of the industrial action.
    
In recent days, AMCU members also voted to strike at Amplats' rivals Lonmin and Impala Platinum (Implats).
    
AMCU president Joseph Mathunjwa told the rally that Amplats would be served notice of the strike action on Monday and workers would down tools on Thursday.
    
The union said last week it would do the same at Lonmin and spokesman Jimmy Gama told Reuters after the mass meeting that Implats would also get its notice on Monday.
    
"Comrades, let's intensify the struggle for a better wage," Mathunjwa, a charismatic lay preacher who has styled himself as a Christian warrior waging class war for South Africa's black workers, said to roars of approval from the crowd.
    
He earlier swept into the stadium in a brand new Lexus car, flanked by three burly white bodyguards, to a rock star welcome and wild cheers from AMCU members, most of whom were clad in the union's trademark green shirts.
    
Such a display of wealth and power is sure to be fodder for the critics of AMCU, which poached tens of thousands of members from the once unchallenged National Union of Mineworkers (NUM) in part by exploiting rank and file perceptions that its rival had grown too close to management.
    
Its turf war with NUM has killed dozens of people and sparked a wave of wildcat strikes in 2012 that pushed Amplats, a unit of Anglo American, into the red that year.
    
But AMCU has been playing by the rules and has permission from a government mediator - a legal requirement in South Africa - to proceed with the strikes, provided it gives the employers notice of at least 48 hours.
    
The union conflict also has political implications as NUM is a key ally of the ANC and speakers criticized the ruling party.
    
Madiba Bukhali, a regional AMCU leader, told the rally that miners had put the ANC in parliament "but now they have forgotten us, now that they are out of this hole."
    
"Zuma, we voted for him but he has built a huge house and forgotten his neighbors," he said, referring to a $21 million state-funded security upgrade to the president's private home that has been widely criticized by the South African press and opposition parties.

Living wage 
    
At Amplats and Lonmin, the union is seeking a minimum monthly wage of 12,500 rand ($1,200) for entry-level workers - more than double current levels, under the populist battle cry of a "living wage". At Implats the union scaled back its demand late last year to just over 8,500 rand.
    
Companies have said they can ill afford steep increases as power and other costs soar against the backdrop of depressed prices for the white metal used in emissions-capping catalytic converters in automobiles.
    
Platinum's spot price shed 11 percent last year and is about 40 percent down from record peaks scaled in 2008.
    
AMCU is also under pressure to deliver on its promises now that it is the dominant union on the platinum belt, setting the stage for a bruising showdown between capital and labor.
    
Miners may struggle to hold out without pay if the strike becomes protracted. The typical South African mine worker has eight dependents, many of whom are peasants in rural areas far from the shafts. This stokes their demands but also means they cannot survive for long without an income.
    
But AMCU is known for its discipline and militancy.
    
Over half of global platinum supply will be halted and around two-thirds or more could be impacted if the strike includes Amplats' joint venture partners, though it is not clear if that will be the case.

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