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Chromium/Platinum Group Metals

UPDATE 4-Platinum union declares end to South Africa’s longest strike – by Zandi Shabalala (Reuters U.S. – June 23, 2014)

http://www.reuters.com/

RUSTENBURG, South Africa, June 23 (Reuters) – South Africa’s AMCU union declared a five-month platinum strike “officially over” on Monday as thousands of miners roared their approval when leader Joseph Mathunjwa asked if they wanted to end the longest work stoppage in the country’s history.

“Yes! Yes!” the miners chorused as the union boss asked whether they wanted to accept the wage offers from producers.

“The strike is officially over,” Mathunjwa then shouted back, to unrestrained jubilation from the tens of thousands of workers packed into Rustenburg’s Royal Bafokeng Stadium, one of the venues for the 2010 soccer World Cup.

The spot price of platinum fell 1 percent, the rand firmed nearly 1 percent against the dollar to two-week highs and the London-listed shares of number three producer Lonmin rose as much as 7 percent.

The precious metal’s two biggest producers, Anglo American Platinum and Impala Platinum, are listed on the Johannesburg stock market. It had closed by the time Mathunjwa finished his two-hour-long speech, but their shares closed up 1.6 percent and 1.1 percent respectively.

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AT HOME AND ABROAD: Mechanised mining is going to devastate rural areas – by Allister Sparks (Business Day Live – June 18, 2014)

http://www.bdlive.co.za/

EVEN as the platinum strike appears to be moving towards a settlement, the consequences of this drawn-out conflict are going to be with us for years to come. Not only will it take the miners themselves years to make up for their lost earnings, but the mining industry itself will never be the same again.

A revolutionary change in the way South Africa’s oldest and most fundamentally important industry operates lies ahead, with far-reaching consequences for all concerned, not least for our future shape of labour relations generally.

The days of “low-wage, high-employment” on which our mining industry was founded nearly 150 years ago are over. A radical switch to “high-wage, low-employment” lies ahead. In the new era, only a few years from now, miners will not only be paid the minimum of R12,500 a month they are demanding now, but much more. However, far fewer will be employed.

Machines will do most of the work and a relatively small number of highly skilled, highly paid mine workers will operate them.

Old mines that are nearing the end of their productive lives, or that don’t lend themselves to mechanisation, will be shut down or sold off to smaller operators that feel they can still operate them profitably. But the big platinum producers will focus on new mines, especially open-cast mines such as Anglo American’s rich Mogalakwena mine in Limpopo, which can easily be mechanised.

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Struggle for a better life has been declared – by Palesa Morudu (Business Day – June 17, 2014)

http://www.bdlive.co.za/

SO IT’s back to where it all started. The platinum mine workers were planning on Monday to hold “back to work” marches across the platinum belt, including at Marikana, the scene of the massacre in August 2012.

For nearly six months, platinum miners have shut down the platinum industry, demanding a basic salary of R12,500 a month. Obed Kgaladi, a locomotive driver at Impala Platinum, was quoted in this newspaper as saying: “It is better not to work and suffer than to work and to suffer…. I want a decent place to stay, healthcare, a car and money to pay school fees for my four children.”

These are not simply demands for better wages. These are cries for human dignity. Because any parent who cannot provide shelter and educate their children is stripped of their dignity.

Kgaladi and his 70,000 co-workers have achieved what they were strong enough to get — and it is substantially more than was initially offered.

While the full details were not available at the time of writing, the monthly increase reportedly ranges from R950 to R1,250 over three to five years. This takes the lowest-paid entry-level miner’s pay to R10,000 in three years and close to R12,500 for rock-drill operators, with the living-out allowance apparently frozen at existing levels.

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UPDATE 4-Union says wage deal to end South African platinum strike is imminent – by Ed Cropley (Reuters India – June 13, 2014)

http://in.reuters.com/

JOHANNESBURG, June 13 (Reuters) – The leader of South Africa’s AMCU union said on Friday a wage deal with the top three platinum producers was imminent, signalling a possible end to a crippling five-month strike that has disrupted global output of the metal.

Workers from the Association of Mineworkers and Construction Union (AMCU) begged leader Joseph Mathunjwa on Thursday to end the country’s longest mining strike and sign the latest offer – an increase of about 20 percent, or 1,000 rand ($93) a month.

Mathunjwa told Johannesburg radio he would take the offer to more AMCU members at mines on Friday, before meeting with management at Lonmin , Anglo American Platinum and Impala Platinum later or over the weekend to relay the response of his miners to their offer.

“At least there is light at the end of the tunnel, which is not the light of a goods train,” he told Talk Radio 702. The main outstanding sticking point was whether the wage deal should stretch over three or five years, he said. “We are in quite a sensitive stage of trying to resolve this and reach an agreement. We won’t do things haphazardly,” he said.

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Amcu leadership, mines agree on a wage deal [South Africa platinum strike] – by Carol Paton and Paul Vecchiatto (Business Day – June 12, 2014)

http://www.bdlive.co.za/

THE five-month platinum strike could end on Friday if workers accept a new offer which would see basic pay increase by R1,000 a month for the lowest paid.

The strongest sign of a deal is that this is the first time in two months that leaders of the Association of Mineworkers and Construction Union (Amcu) have taken an offer to workers for consideration.

A previous offer of an R800 a month increase was rejected by leaders who chose not to take it back to workers.

Lonmin, Anglo Platinum and Impala Platinum announced that “in principle” undertakings were reached with the leadership of the Amcu in respect of wages and conditions of employment. Amcu would be discussing these with its members to seek a mandate to accept the offers which, if given, would bring to an end the 21-week long strike.

The potential agreement sought to create “a sustainable future for the three platinum companies for the benefit of all stakeholders and to afford employees the best possible increase under the current financial circumstances”.

Amcu president Joseph Mathunjwa and treasurer Jimmy Gama began reporting back at mass meetings at noon on Thursday. Workers who took to the podium both criticised and supported the offer.

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Palladium futures hit highest level since 2001 amid South African mining strike – by Peter Koven (National Post – June 12, 2014)

The National Post is Canada’s second largest national paper.

Palladium futures have soared to their highest levels since early 2001. And with no end in sight to a key supply disruption, many experts predict there is still room for prices to run.

Prices for the silvery-white metal have jumped about 20% this year, with the key futures contract hitting a 13-year high on Wednesday of US$864.60 an ounce. The main reason is a strike in South Africa, which began in January and is now the longest mining strike in the country’s history.

Recent talks to end the dispute failed, and it is not clear when they will restart. South Africa accounts for nearly 40% of global palladium production, second only to Russia.

“It’s quite conceivable that palladium could really pop if the mines in South Africa don’t restart soon,” said Patricia Mohr, vice-president and commodity specialist at Scotiabank.

Not surprisingly, uncertainty about Russia is also causing jitters in the palladium market. There are some concerns that sanctions could be placed on Russian companies — including key palladium producer OAO Norilsk Nickel — in response to the seizure of Crimea.

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 Latest breakdown bodes ill for SA platinum miners – by Lawrence Williams (Mineweb.com – June 10, 2014)

http://www.mineweb.com/

LONDON (MINEWEB) – As we reported here earlier, the latest round of government mediated talks between the Association of Mineworkers and Construction Union (AMCU) and the platinum miners running the mines which account for 30-40% of South Africa’s platinum output, broke down yesterday and the new South African Mines Minister, Ngoako Ramatlhodi, and his team have withdrawn from the negotiations – at least for now. However platinum exports are so key to the South African economy that one suspects further efforts will be forthcoming.

With the South African government mediators ditching recent platinum strike negotiations we look at potential outcome regardless of who wins or loses.

The principal mining companies involved – Anglo American Platinum (JSE:AMS), Impala Platinum (JSE: IMP) and Lonmin (LON:LMI) have thus released a joint statement to the effect that this latest round of negotiations ‘have been dissolved without an outcome’.

AMCU’s President, Jospeh Mathunjwa issued his own statement thus: “AMCU made many concessions. We actually moved twice to make employers move closer to us,” he said, but added that the union did not compromise its demand for a 12,500 rand ($1,200) a month basic wage, which excludes allowances. And it is these allowances, which in percentage terms are quite significant, which are the key here. The mining companies have moved to say they will meet the demands for a R12,500 minimum wage by 2017, but this would include these benefits and the union says this is unacceptable and has clung to its position no matter what. It has not given any significant ground in its demands right from the start.

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Outlook for mining is about the future of jobs – by Gavin Keeton (Business Day Live – June 9, 2014)

http://www.bdlive.co.za/

Keeton is with the economics department at Rhodes University.

THE platinum strike is in its fifth month. We learned last week that it has already caused a 0.6% annualised contraction of South Africa’s gross domestic product (GDP) in the first quarter. Mining production shrank a huge 25%. Manufacturing contracted, too, at an annualised 4.4%. Some of this is because manufacturers supplying the platinum mines are also being hurt by the strike. But it also reflects a deeper weakness in the economy as a whole, which was already causing great anxiety.

Since 1994, GDP has fallen in only four quarters. GDP declined for one quarter in 1998 and for three quarters in 2008-09. Both times the causes were external. This time, the contraction is entirely self-inflicted.

The social costs of the strike are huge. Religious leaders speak of hungry adults stealing from children at school feeding projects. HIV-positive mine workers on antiretrovirals have been denied access by strikers to the mine clinics where they receive these life-saving drugs. To survive, most strikers will have borrowed from money lenders at exorbitant interest rates.

Their debt repayments will swallow up any increase they gain in wages as part of a settlement. The indebtedness of the mining companies is also rising as without income, their obligations under existing loans escalate. This will reduce future profitability and so the Treasury will bear some of the long-term costs of the strike through reduced tax revenues.

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Breakdown in platinum strike talks propels South Africa closer to recession – by Geoffrey York (Globe and Mail – June 10, 2014)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

JOHANNESBURG — Wage talks have collapsed again in South Africa’s 20-week platinum strike, the latest ripple in a cascade of bad news that has pushed the country closer to recession and threatens to trigger a major restructuring of its platinum industry.

The strike has already inflicted huge damage on South Africa’s economy, the traditional African powerhouse and second biggest on the continent. The economy declined by 0.6 per cent in the first quarter of this year, its first contraction since 2009, and there are growing fears that the decline will continue in the next quarter.

The strike by 70,000 workers, the longest in South African mining history, was a key reason for the shrinking gross domestic product in the first quarter, since mining is still a huge contributor to the economy. Without a resolution to the strike, a recession is nearly inevitable, analysts say.

Equally inevitable are the closing of mine shafts and a shift toward mechanized mining in an industry that produces about 40 per cent of the world’s platinum output.

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Platinum Price Posed For Big Rise If South African Strike Talks Fail Again – by Tim Treadgold (Forbes Magazine – June 7, 2014)

http://www.forbes.com/

Investors with a taste for precious metals will be watching the platinum market closely next week because if last ditch talks to end a five-month long strike by workers in South Africa’s all-important platinum mining industry are not successful the price of the metal could rise sharply.

That platinum has not reacted positively to the strike by 70,000 mine workers is one of the more interesting aspects of an event which has affected an estimated 40% of the world’s supply of platinum, a metal which plays an essential role in controlling noxious emissions from vehicle engines, as well having a market in the jewelry industry.

Normally, any commodity which has almost half of its supply effectively removed from the market, would enjoy a strong price response. That has not been the case with platinum, yet.

Worker, Management Stand-Off

There have been short-lived price spikes since the strike started over a claim by mine workers for a near tripling of entry level wages to around $1180 a month by the year 2017, and a mining company response which was a fraction of the claim.

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UPDATE 2-Minister quits deadlocked S.African platinum strike talks – by Zandi Shabalala (Reuters India – June 9, 2014)

http://in.reuters.com/

PRETORIA, June 9 (Reuters) – Wage talks between South Africa’s AMCU union and major platinum producers were deadlocked on Monday, prompting the mining minister to abandon his mediation role and dashing hopes for an end to a strike that is pushing the economy towards recession.

The five-month strike has halted mines that normally account for 40 percent of global platinum output and has hit wider economic output in Africa’s most advanced economy, driving it into contraction in the first quarter of this year.

The meeting on Monday was crucial as the government had said it would pull out of its mediation role if a deal was not struck then – and, after the talks ended at an impasse, it duly announced that the mining minister would no longer take part in negotiations.

“No agreement was reached today,” Joseph Mathunjwa, president of the Association of Mineworkers and Construction Union (AMCU), told reporters as he left the talks in Pretoria.

“AMCU made many concessions. We actually moved twice to make employers move closer to us,” he said, but added that the union did not compromise its demand for a 12,500 rand ($1,200) a month basic wage, which excludes allowances.

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Anglo Says Platinum Pay Fight Inevitable on Productivity – by Firat Kayakiran (Bloomberg News – June 6, 2014)

http://www.bloomberg.com/

Anglo American Plc (AAL)’s four-month battle with a labor union at its South African platinum mines was inevitable because the requests by workers are unsustainable, Chief Executive Officer Mark Cutifani said.

“It’s the fight we had to have,” Cutifani said yesterday in a speech in London. “What’s being asked, for us is unsustainable. And at the same time, the productivity in the platinum sector is one tenth the productivity in the Australian mining sector and we are paying one fifth of the wages.”

Anglo controls the world’s largest platinum producer, which has been disrupted by a strike in South Africa since January. The Association of Mineworkers and Construction Union has called more than 70,000 miners out, including employees at Anglo American Platinum Ltd. (AMS)

Union members are on strike over a demand for basic monthly pay excluding benefits for entry-level underground employees to be more than doubled to 12,500 rand ($1,168) by 2017. The producers have said increases of that order would cost too much.

Minister of Mineral Resources Ngoako Ramatlhodi is coordinating talks between the union and Anglo American Platinum, Lonmin Plc (LMI) and Impala Platinum Holdings Ltd. (IMP), which continue in the South African capital, Pretoria, for a third day today.

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South Africa’s mines minister: from hunter to strike buster – by Zandi Shabalala and Ed Stoddard (Reuters India – May 29, 2014)

http://in.reuters.com/

JOHANNESBURG – (Reuters) – In his spare time, South Africa’s tough new mines minister, Ngoako Ramatlhodi, enjoys stalking game with a rifle in the wild bush of his native Limpopo province.

Hunting season is in full swing but Ramatlhodi has his eye on bigger game: a solution to a crippling platinum strike, the longest in the history of the country’s mines, which threatens to tip Africa’s most advanced economy into recession.

“I am focused on the strike. It’s my breakfast, lunch and supper,” Ramatlhodi told Reuters in an interview. Sworn in on Monday, he has waded straight into the fray, dragging the mining union and platinum firms back to the negotiating table after the latest round of talks collapsed.

Ramatlhodi looks determined to bring an end to the 18-week strike which has hit 40 percent of global production of the precious metal used to make catalytic converters that reduce pollution from automobiles.

“He summoned the parties back and said we are going to talk,” a union source familiar with the matter told Reuters after talks again stalled on Wednesday. Ramatlhodi has set-up a government mediation team which includes treasury officials.

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

http://www.bloomberg.com/

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.

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Untested new South Africa mines minister faces baptism of fire – Ed Stoddard (Reuters India – May 26, 2014)

http://in.reuters.com/

JOHANNESBURG, May 26 (Reuters) – South African President Jacob Zuma’s appointment of a new mines minister unfamiliar to the sector but known for his black empowerment views adds uncertainty to prospects for ending a crippling four-month-old platinum strike this is hurting growth.

The stoppage at Anglo American Platinum, Impala Platinum and Lonmin is already the longest in the country’s history and has damaged Africa’s most advanced economy. It is also showing signs of descending into violence. Five miners have been killed in the past two weeks as some seeking to return to work face strike pickets. The latest round of wage negotiations to try to end the dispute, mediated by a labour court judge, has made little headway.

This will mean a baptism of fire for Mines Minister Ngoako Ramatlhodi, a 58-year-old lawyer and former deputy minister in the prison service, who was named as part of Zuma’s new-look cabinet on Sunday.

By contrast, the promotion to finance minister of Nhlanhla Nene, who takes over from the respected Pravin Gordhan, was taken as a sign of continuity in the reshuffle, which follows the ruling African National Congress’s convincing re-election on May 7.

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