Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Anglo American Platinum Ltd. sealed a five-year wage deal with some of the biggest labor unions in South Africa, a move that may help bring stability at the world’s most profitable platinum miner.
The agreement between the Anglo American Plc unit, the Association of Mineworkers and Construction Union, National Union of Mineworkers and the UASA union is effective from July. It may help calm investor nerves about labor unrest in the mining sector, as about 163,000 workers in South Africa’s platinum industry press for a share of windfall profits generated by a rally in metal prices.
Amplats is prepared to share with employees, Chief Executive Officer Natascha Viljoen said.
“When we saw really good prices, that is where we build into our employee share scheme, a process that if times are good, we also share if the times are good,” she said.
With the specter of South Africa’s longest-ever mining strike in 2014 looming over negotiations, producers of platinum-group metals have tried to reach wage deals more amicably. The nation is the world’s top supplier of platinum and rhodium, and is also the biggest palladium producer after Russia, metals that are key to curbing vehicle emissions.
Amplats agreed to give its workers a monthly increase of 1,150 rand ($73) in the first year of the deal, which will then climb to 1,500 rand by the fifth year. A 7.5% increase for the lowest paid workers is above South Africa’s 5.9% inflation rate in April.
The company will keep working toward lifting the wages of the lowest paid, Viljoen said. Amplats and the unions are flexible about renegotiating the agreement if South Africa’s inflation climbs above 7.5% or falls below 3%, she said.
“We are in a continuous process of looking after the lowest paid colleagues in our business,” Viljoen said. “There’s a recognition that as an industry, we need to do more in that category.”
(By Felix Njini)
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