South Africa Raises Effort to End 18-Week Platinum Strike – by Andre Janse van Vuuren (Bloomberg News – May 28, 2014)

South Africa’s new mining minister called on the nation’s treasury and labor departments to assist in ending a four-month strike over pay that’s crippled local operations of the world’s three largest platinum producers.

The government team set up by Minister of Mineral Resources Ngoako Ramatlhodi, who took office two days ago, will meet officials from Anglo American Platinum Ltd. (AMS), Impala Platinum Holdings Ltd. (IMP) and Lonmin Plc (LMI) tomorrow as well as representatives from the main union at their operations, his department said in a statement on its website. This follows talks with producers today and the union yesterday.

More than 70,000 members of the Association of Mineworkers and Construction Union have been on a pay strike since Jan. 23. The industry’s longest and costliest stoppage saw its economic contribution drop the most in 47 years in the first quarter, resulting in the first contraction in gross domestic product since a 2009 recession, according to Statistics South Africa.

“All parties are hurting,” Ramatlhodi said in the statement. “We have no option but to find an amicable solution.” The parties will “explore all possibilities for a resolution” tomorrow and “report back by the end of the day on what is possible,” he said.

Talks between employers and the union mediated by a labor-court judge have yet to result in an agreement, imperiling the second-largest economy on the continent.

Mediation Stop

“It appears like the mediation has come to a stop yesterday,” Ramatlhodi told Talk Radio 702 separately. He took over the mines portfolio from Susan Shabangu, who was appointed to the position by President Jacob Zuma in 2009.

The government’s intervention will “support the mediation process that’s being facilitated by the Labour Court,” the producers said in a statement today.

The AMCU wants 12,500 rand ($1,192) in basic monthly pay excluding benefits by 2017 for entry-level underground employees. The demands equate to a 30 percent increase in the first year of a deal, which employers say is unaffordable. They’re offering raises of as much as 10 percent annually. South African inflation was 6.1 percent in April.

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