CAPE TOWN--South Africa's mining minister sought to ease
investor worry over the country's unstable labor environment on
Tuesday, but said companies must do more to transform the
sector.
"We have intervened," Minister of Mineral Resources Susan
Shabangu said of the government-mediated talks to help end a costly
strike currently hitting the platinum companies.
Speaking at the continent's biggest mining event in Cape Town,
Ms. Shabangu said that while government helps to "stabilize" the
industry, companies too must contribute by carrying out a
government-mandated program to transform ownership of mining
companies and fund skill training.
The world's three largest platinum producers-- Anglo American
Platinum Ltd., Impala Platinum Holdings Ltd. and Lonmin PLC--are
trying to end a strike that started Jan. 23 by the dominant union
in the sector, the Association of Mineworkers and Construction
Union, to demand higher wages. The strike is costing the industry
about $18 million a day in lost revenue. A second union, the
National Union of Metalworkers, joined the strike on Monday at
Anglo American Platinum.
Last week, Lonmin said because of the strike it would may have
to lower its production outlook for the year. On Monday, Anglo
American Platinum said if the strike lasts for many weeks it could
be forced to consider more of its marginal mines.
Mining accounts for 6% of South Africa's gross domestic product
and mineral exports make up 60% of its export revenue. Companies
have already cut several hundred jobs because of costly strikes and
a weakening demand environment in the past two years--a blow to
South Africa's high unemployment rate of around 24%.
The workers on strike now are demanding that their employers
raise entry-level salaries to 12,500 rand ($1,150) a month from
around 5,000 rand. Companies have offered an increase of up to
9%.
If companies agreed to the union demand, that would increase
costs by 13 billion rand, Anglo American Platinum said, adding that
isn't something the industry can afford right now.
Write to Devon Maylie at devon.maylie@wsj.com
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