The five month old strike by at least 70,000 workers of platinum mines in South Africa may have been withdrawn recently but the sector is still struggling to revive from its crippling and economically devastating effects as some 2000 workers of Impala Platinum Holdings Ltd. are reported to have once again gone on strike despite the recent wage revision deal signed by miners and the workers’ unions.
The members of the Association of Mineworkers and Construction Union (AMCU) had been striking work at platinum mines from January 23, 2014 with a demand of increase in salary of R12 500 a month. The strike ended in on 24th June, 2014 with the miners accepting a wage increase amounting nearer to that figure.
South Africa boasts to hold about 80% of the global platinum reserves, accounting for 70% of world’s output which is used for jewellery, catalytic converters in vehicles and as a source of hard currency for the country.
The sector has lost more than R20 billion in the strike which is regarded as the worst ever and longest in the country’s history, has badly hit the mining sector. The big three platinum producers – Anglo American Platinum, Impala Platinum and Lonmin – warned of permanent effects of the strike in a joint statement.
“The strike by the platinum workers was unprecedented, and it was resorted to at a stage where some of its impacts would become irreparable. These impacts would not only harm the companies, but also employees, local businesses, suppliers and communities at large.”
According to the above-mentioned miners, some of the mines and shafts have become unviable. In addition to that, people were going hungry and children were not going to school and some business-units had shut down while crime scale in the platinum belt was ravaging communities in the area. The prevailing situation including financial losses is exceptional in scale, said the top miners.
The platinum mining giants like Anglo American Platinum, Impala Platinum, and Lonmin are said to be preparing to mechanize, close some shafts and retrench some workers. The platinum sector in South Africa is responsible for providing 40% of the global output but the sector saw a 24.7% drop in production because of the strike.
The country’s longest-ever strike has cost the platinum mining sector 1.1M oz. in terms of production and helped shrink the country’s economy by 0.6% in Q1 in comparison with the previous year. The world’s three-biggest platinum producers – Amplats (AAUKF, AAUKY), Impala Platinum (IMPUY) and Lonmin (LNMIF) – reveal they each has lost roughly one third of their annual production. Platinum analysts say it would take at least three to five months to get production back to pre-strike levels.
Post-strike, although there is a tough recovery task ahead of the platinum sector, its time for the global platinum lovers including those in India to cheer up as in a few months from now, the sector would get regular supply of the supreme metal.
As far as India’s platinum jewellery demand is concerned, it is likely to rise by 35% by the end of 2014, according to the Platinum Guild International (PGI). The reason is quickly changing consumer choices, especially from the bridal segment which was earlier confined to gold and diamonds. So, end of the strike has brought a great relief not only for the global platinum sector but the workers also.
Posted by Suresh Chotai
