Sibanye Says Unions Using Gold Strike to Leverage Platinum Deal
(Bloomberg) -- Sibanye Stillwater Ltd. said the almost two-month long strike at its South African gold mines is being used as leverage by labor unions for upcoming wage negotiations at its platinum operations.
South African miners, including Anglo American Platinum Ltd. and Impala Platinum Holdings Ltd., are entering pivotal talks over a multiyear pay deal after announcing record dividends following a rally in palladium and rhodium prices. While unions are seeking a share of the windfall profits, producers have warned that any settlement with 163,000 platinum workers must not risk the long-term viability of a key export industry.
Sibanye Chief Executive Officer Neal Froneman said the unions were trying to show strength after rejecting the company's latest offer to boost the wages of gold workers by 850 rand ($54) a month. That equates to an increase of 7.8% -- compared with South Africa's March inflation rate of 5.9% -- but the unions are asking for 1,000 rand.
“If it was just about gold wages, there is no commercial logic for them not having accepted our offer,” Froneman said in an interview in Johannesburg. “We are not going to be coerced or bullied into increases that are above inflation.”
The strike, which started on March 10 at the company's three gold mines, is taking its toll. Sibanye's first-quarter gold output plunged 45% to about 137,000 ounces. The company said on Thursday that it had suspended output guidance for the operations.
Sibanye shares fell as much as 9.3% in Johannesburg trading, the most in two years.
The company said on Thursday that first-quarter earnings before interest, taxes, depreciation and amortization fell 31% to 13.7 billion rand amid operational challenges at its U.S. palladium and platinum mines.
The Association of Mineworkers and Construction Union and National Union of Mineworkers are consulting their members over whether to expand the strike to the company's platinum operations, said NUM General Secretary William Mabapa. Sibanye's gold and platinum mines employ about 77,000 workers.
While platinum wage deals have been settled fairly smoothly during recent negotiating rounds, in 2014 AMCU led South Africa's longest ever strike in the industry. Sibanye's gold mines were hit by a five-month strike over wages by AMCU members in 2019.
©2022 Bloomberg L.P.
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