South Africa – First Signs Of Labor Problems For The World’s Top Platinum Nation

South Africa – First Signs Of Labor Problems For The World’s Top Platinum Nation

South Africa – First Signs Of Labor Problems For The World’s Top Platinum Nation by Dave Forest, Pierce Points

I wrote last week about looming problems in South Africa’s platinum sector. With mining companies in the world’s top-producing nation coming up to tough contract negotiations with platinum unions.

And it didn’t take long after that writing for labour issues to explode into action.

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Last Friday, top platinum workers’ union AMCU announced a strike at the Kroondal mine operated by Sibanye Gold. With workers walking off the job over a slate of demands including worker benefits.

The strike quickly got complicated. When Sibanye filed a court motion over the weekend claiming the strike was illegal — which was upheld by judges, who declared the labor action “unlawful”. Effectively ordering AMCU miners back to work.

AMCU officials held an internal meeting Monday, and said they would indeed call off the strike. Meaning that the impacts from this action on production will be limited.

But the wider implications of this brief saga are important. Suggesting that South Africa’s platinum unions may be gearing up for tough negotiations with mining companies.

The fact that the AMCU carried out such an illegal strike suggests the group didn’t expect this to be a prolonged action. Union leaders certainly would have known they would be ordered back to work after they didn’t follow the protocols for declaring a legal strike.

That suggests this action was meant  as a “shot across the bow” for mining firms like Sibanye. Signalling the union’s willingness to take drastic action as the two sides enter negotiations over pay and benefits.

AMCU officials said they will now meet with Sibanye representatives to start discussing demands. With these talks almost certain to be more tense following the events of the past weekend.

Watch for news on the progress of negotiations — and for possible additional strike action if unions don’t get what they want in terms of pay increases and other demands.

Here’s to taking action,

Dave Forest

South Africa

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Dave Forest writes Pierce Points Free Daily E-Letter, an advisory on mining and energy read every day by BP, Rio Tinto, JPMorgan, BNP Paribas, Repsol, GDF Suez, GE, Platts, Warburg Pincus, and the UN. Sign up for free at Mr. Forest has funded and managed over $80 million in global exploration and development in natural resources, and continues to design and develop projects globally. He is a professional geologist.
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