SA strike expected to push PGM prices

SA strike expected to push PGM prices
Published: 13 March 2014
The protracted industrial action by mine workers in South Africa, the world's largest producer of platinum, could result in an upturn of platinum prices, the local mines body has said.

Chamber of Mines of Zimbabwe president Mr Alex Mhembere said prolonged labour unrests in South Africa, which have affected production, could push up prices of platinum.

"While we do not wish anything bad for our neighbours, we believe the situation (industrial action) will remove some of the excess stock in the market and we expect an upturn in prices if the situation prolongs in South Africa," Mr Mhembere said. Prices have averaged $1 472 per ounce this month.

Members of the Association of Mineworkers and Construction Union downed tools in January as part of the labour group's call for basic monthly pay to be more than doubled.

Talks between striking workers and Anglo American Platinum, Impala Platinum Holdings and Lonmin, which together account for more than two-thirds of all the platinum mined globally, collapsed on Wednesday last week after a state mediator said the parties remained far apart.

Amcu wants pay for entry-level miners to rise to R12 500 from about R5 000. More than 70 000 members of the union have been on strike since January 23.

Producers say they have lost a combined $680 million in revenue and employees have forfeited more than $300 million since the strike started.

Mr Mhembere, however, pointed out that, in the long term, the industrial action was not good for the stability of the industry considering that South Africa was a major platinum producer.

While the local producers have been fortunate that they have not faced similar labour unrests, they too have failed to reach common ground with workers over minimum salaries. Mr Mhembere said it was a process of finding each other.

"There have been challenges with our collective bargaining. People always want to maximise their positions and still have not agreed, but I think there is mutual understanding from employers and employees," he said.

Associated Mines Workers Union of Zimbabwe president Mr Tinago Ruzive recently said the employers, represented by CoMZ was only prepared to award a 3,5 percent increment, saying they want to give an inflation-linked increment.

Employers, AMWUZ said at $227, they were already offering close to the poverty datum line threshold workers are demand if a number of benefits they provide are factored in.

Zimbabwe, which is the world's third biggest producer after South Africa and Russia and has the second largest deposits and has three active platinum group metal (PGM) producers namely  Zimplats, Mimosa and Unki, all units of South Africa firms.

However, the local miners cannot not take advantage of the depleting global stock levels considering that they all do not have idle capacity.
- herald
Tags: Platinum, Strike,


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