South African Platinum Miners End Strike
June 27, 2014
For five months South African has been without its largest supply of platinum mining labor. The Association of Mineworkers and Construction Union (AMCU) have been on strike for almost half a year due to issues with wages. The five-month strike is the longest for South Africa but on Monday, union President Joseph Mathunjwa struck a deal that will end the strike and see platinum miners return to work.
Though the wage agreement is short of what the union was demanding, it should increase annual pay by about $94 per month for a 3-year period. Mathunjwa broke the news to several thousand platinum miners at a stadium in Rustenburg.
The agreement is good for years but will start retroactively from 2013. The mining companies were hoping for a five year deal but the union stood firm since their demand for tripling all worker's entry-level salaries was denied.
The strike saw nearly 70,000 workers walk off the job and the impact was devastating. South Africa's fragile economy was rocked by platinum producers losing nearly $2 billion in revenue while workers lost nearly $1 billion in unpaid salaries. The South African economy shrank 0.6% in the first quarter from a year ago. It was the first contraction of the economy since 2009.
Analysts estimate it could take three months for the platinum mining sector to be operating at pre-strike levels. Platinum companies have yet to make any announcements since deals have been dashed recently by last-minute demands by the union.