Platinum Talks Today Will Seek End to Pay Strike at Mines – by Kevin Crowley, Andre Janse van Vuuren and Paul Burkhardt (Bloomberg News – January 24, 2014)

South Africa’s government will today mediate talks between union officials and the world’s three biggest platinum producers as a strike that’s crippling mines enters a second day.

Labor Minister Mildred Oliphant will lead talks between Anglo American Platinum Ltd. (AMS), Impala Platinum Holdings Ltd. (IMP) and Lonmin Plc (LMI) and the Association of Mineworkers and Construction Union, said Musa Zondi, her spokesman. The discussions were due to begin at 9 a.m. in Johannesburg. The companies should expect “marathon negotiations,” AMCU President Joseph Mathunjwa said.

“There are pressures from all sides” to reach an agreement, AMCU Treasurer Jimmy Gama said today by phone. “When you have these pressures, all the parties need to apply their minds constructively to deal with the issue.”

At least 70,000 employees downed tools at platinum mines yesterday in South Africa, home to 70 percent of the world’s production of the metal, causing about $13.1 million of lost revenue on the first day. The police stepped up safety measures as it sought to avoid a repeat of labor unrest that claimed the lives of at least 44 workers near platinum mines in August 2012.

The AMCU, the biggest representative of workers at the mines, has said it will continue the walkout until pay demands are met. The union wants wages for the lowest-paid entry-level miners to be more than doubled to 12,500 rand ($1,134) a month. South Africa’s inflation rate was 5.4 percent in December.

Rand Decline

The rand was little changed at 10.9884 per dollar at 10:03 a.m. in Johannesburg today. The platinum producers incur most of their costs in the South African currency, which has depreciated 23 percent since the start of last year against the dollar, in which platinum is priced.

Platinum for immediate delivery fell 0.1 percent to $1,456.13 an ounce. Amplats decreased 0.9 percent to 438 rand. Impala climbed 0.8 percent to 128.55 rand while Lonmin lost 1.8 percent to 57.55 rand.

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