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UPDATE 2-Amplats sees end to S.Africa strikes, lower earnings
November 14, 2012 / 1:41 PM / 5 years ago

UPDATE 2-Amplats sees end to S.Africa strikes, lower earnings

* Strike leaders to get feedback from miners

* Amplats hopes workers will return Thursday

* Amplats says expects year earnings to fall over 20 pct (Recasts with new offer, profit warning)

By Olivia Kumwenda

JOHANNESBURG, Nov 14 (Reuters) - Anglo American Platinum , the world’s top producer, expected miners to return to work on Thursday after accepting a new pay deal to end weeks of wildcat strikes which it warned would cut annual profit by more than a fifth.

The unit of troubled global mining giant Anglo American has been struggling for two months to end the walkouts, part of a wave of often violent labour unrest that has swept through South Africa’s mines, rattling foreign investors.

The strikes, spawned by glaring income disparities and a union turf war for members, have cost Amplats close to 170,000 ounces in lost platinum production which would fetch around $250 million at current spot prices.

Amplats said on Wednesday it expected 2012 earnings to fall by at least 20 percent after its interim profits plunged almost 80 percent. It said the decrease was primarily a result of lower sales volumes and strikes.

The update added to a gloomy week for Anglo American as it searches for a new chief executive to replace outgoing Cynthia Carroll.

On Tuesday the company raised cost estimates for its Minas-Rio project in Brazil and warned of lower profit from its South African iron ore unit Kumba.

Strikers in South Africa had rejected Amplats’ offer including a 4,500 rand ($510) one-off payment and a pledge to start wage talks ahead of the expiry of current deals next year.

Amplats spokeswoman Mpumi Sithole said in addition, the company has offered to pay each qualifying employee either an additional monthly allowance of 600 rand or a monthly salary increase of 400 rand.

“Indications are that the strike committee members are happy with the revised offer. They will today present the offer to their members and encourage them to return to work tomorrow,” Sithole told Reuters.

Amplats on Monday gave the workers until Wednesday to return to work or face the sack. Over 30,000 Amplats workers have been off the job.

The country’s gold and platinum sectors have been rocked by months of strikes that have resulted in over 50 deaths, mostly at the hands of police. Almost all of the affected gold operations are back to work.


Tensions remain with periodic flare-ups. South African police arrested 37 workers for public violence on Tuesday after firing rubber bullets to disperse protesters who barricaded a road leading to a chrome mine operated by Xstrata.

Most of the affected Amplats’ mines are close by near the platinum belt’s hub city of Rustenburg, about 120 km (75 miles) northwest of Johannesburg.

Anglo is carrying out a review of its South African platinum operations expected to lead to shaft closures and job losses which could stoke tensions further.

Workers had demanding a salary increase of 4,500 rand per month which Amplats said would add about 2.6 billion rand to its wage bill.

Global platinum supply in 2012 will hit an 11-year low largely because of the strikes’ impact on production and demand will outstrip available stocks, refiner Johnson Matthey said on Tuesday.

$1 = 8.7701 South African rand Editing by Ed Stoddard and David Cowell

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