Anglo American Platinum (Amplats), one of the world’s leading producers of the precious metal, has signed a five-year, inflation-beating wage agreement with three labour unions that will probably set the benchmark in pay talks with other producers.
The deal with the Association of Mineworkers and Construction Union (Amcu), National Union of Mineworkers (NUM) and the United Association of SA (Uasa) will be implemented on July 1.
The agreement means the lowest-paid employees will receive monthly increases of 7.5% or R1,100 in the first year, rising to R1,500 or 7.5% in year five. A surface worker on the lowest pay grade, earning R13,800 a month, will take home R20,350 in the fifth year, while an underground worker’s salary will rise to just over R21,000 over the same period.
Supervisors will get increases of 6% in years one to three and 6.5% in the last two years. The Reserve Bank forecasts headline inflation rate of 5.9% for 2022. Amplats’ contribution to employees’ medical aid will increase by 7% a year.
René Hochreiter, a consulting mining analyst at Noah Capital Markets and MD of Sieberana Research, said the wage agreement would be used as a benchmark by unions in wage talks with other platinum producers that are due to start in June or July.
The wage agreement increases salary and salary-related allowances, which will increase Amplats’ total labour cost-to-company, by 6.6% a year on average over the five-year period.
The mining industry, which contributes about 9% to GDP and directly employs about 500,000 people, has benefited from higher commodity prices, which has resulted in workers demanding a fair share of the profits.
Viljoen said Amplats’ wage bill is about 32% of the group’s total costs. In its 2021 integrated annual report the group reported revenue of R215bn, headline earnings of R79bn and net cash of R49bn.
The agreement, which Viljoen said was reached after five meeting held over two months, allows for fresh negotiations if CPI rises above 7.5% or falls to 3% or below in year four or five.
“We believe this multiyear agreement will enable our business to remain sustainable through PGM (platinum group metal) price cycles, while also ensuring that our people are rewarded for their work as we seek to deliver enduring value for all our stakeholders,” Viljoen said
Amcu president Joseph Mathunjwa said workers had to contend with rising transport and healthcare costs, “hence the [wage] demands are becoming higher”.
NUM president Dan Baipile called on Viljoen to talk to Sibanye-Stillwater CEO Neal Froneman and “teach him a few things about how to conduct wage negotiations in future”.
“He is too arrogant,” Baipile said of Froneman, whose 2021 salary package amounted to R300m. Sibanye-Stillwater has refused to accede to demands by NUM and Amcu for a wage increase of R1000 a month for three years for workers at the company’s gold operations, saying the increase is unsustainable.
Sibanye is offering R800 and an increase of R50 in workers’ living out allowance. Striking employees have lost more than R1bn in wages to date.
“A five-year agreement gives space to unions and the employer to engage on other things. On a three-year agreement you will forever be at loggerheads,” Baipile said.
Hochreiter said Sibanye’s gold operations weren’t making money. “The situation in the platinum side is much better than in the gold side. The best thing for Sibanye to do is to close the mines down if they carry on with the strike. At the moment they are saving half the costs because half of the costs are labour costs,” he added.
Impala Platinum “is going to do the same thing” as Amplats and reach a wage settlement without a strike, Hochreiter said. Sibanye could follow suit at its platinum operations, he added.
Update: May 26, 2022
This article has been updated throughout with new information
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.