AMCU signs wage deal to end five-month strike in South Africa

24th Jun 2014 14:12

Members of a South African platinum mining union are expected to return to work on Wednesday after a new three-year wage agreement was signed to end five months of strikes that have crippled the platinum mining industry in South Africa.The Association of Mineworkers and Construction Union (AMCU) have settled on an agreement with producers Lonmin, Amplats and Implats that is effective from October 2013 to June 2016, and increases the basic salary of the lowest-paid underground worked by R1,000 per month for each year of the agreement. Living-out and housing allowances will also increase.The deal "brings to an end the extreme hardship suffered by all stakeholders, the country, our communities, suppliers and in particular our employees, over the last five months", according to Lonmin Chief Executive Ben Magara."We believe that signing this agreement with our majority union is the only way forward in rebuilding our business," he said.Magara said there is still "much to be done" to restart operations fully and that a restructuring of the business is "inevitable to ensure sustainability". He said that given the prolonged strike and continuing low platinum group metal (PGM) prices, restructuring and productivity improvements "are essential".Amplats, a subsidiary of Anglo American, said in a separate statement that production of 423,904 platinum ounces was lost during the strikes, equating to R11.28bn (£630m) of lost revenue for the company at current prices.Lonmin shares were down 1.5% on Tuesday afternoon, while Anglo was trading 0.3% lower.BC