World’s platinum miners prepare for crunch talks with South African labour unions

The world’s biggest platinum mining companies will meet with South Africa’s labour unions this month to negotiate a three-year wage deal, in one of the first tests of Cyril Ramaphosa’s new presidency.

Tensions are rising in the platinum sector on both sides and there are fears that an unamicable outcome from the wage talks this month will see the labour unions go on strike, which could send platinum prices soaring.

The industry is bracing itself for a tough round of talks, with the Association of Mineworkers and Construction Union (Amcu) – the largest and most militant labour organisation in the sector – expected to push for higher wages.

The negotiations will put Amcu and three other unions against at least seven producers, including Impala Platinum, Anglo American Platinum and Sibanye Gold.

Platinum group metals (PGMs) are one of South Africa’s biggest exports, but less than year ago producers were closing shafts and cutting thousands of jobs as stagnating metals prices and a stronger rand combined to squeeze profit margins.

Industrial action similar to the 2014 strike – which cost around US$2 billion in revenue – would hurt both the industry and the unions, according to Peter Major, a mining analyst at Mergence Corporate Solutions.

“There is no more commodities boom, and no money for mining investments in South Africa,” he said. “This country’s economy is on its knees and mines are really shedding jobs.”