SA’s Amcu: triple platinum strike whammy
South Africa’s upstart miners’ trade union, Amcu, is starting 2014 with a bang.
Not content with becoming the recognised union over the older, more established National Union of Mineworkers (NUM), it is looking to pull off the impressive feat of organising strikes at South Africa’s three biggest platinum companies – Lonmin, Anglo American Platinum (Amplats), and Impala Platinum (Implats). That’s a combined 70,000 workers. And, more importantly, around two-thirds of the world’s platinum output.
Shares though, in the three companies, are all up. The theory is that a potential disruption to platinum supplies will send prices higher, thus helping producers. On Monday, Amplats was up over 2 per cent before falling back to a 0.7 per cent rise on the day; Implats was up 1.1 per cent; and Lonmin shares rose 2.9 per cent in London.
But investor sentiment can change when it comes to strikes: protracted unrest and damaged labour relations can have a negative impact on shares. So can concerns over long-term supply and spiraling wage costs.
The unprecedented three-way strike organised by Amcu (the Association of Mineworkers and Construction Union) is planned to start on January 23. But don’t expect it to end swiftly. The wage demands of the union are quite high: a R12,500 per month minimum wage across the sector, which would more than double the salary for the lowest-skilled workers. The union, having only recently been recognised as the major player at Lonmin and other miners, will be keen to show it can deliver for members....MUCH MORE
