The effect of the six-week strike at Impala Platinum (Implats) earlier this year, when rival unions battled for membership, was so severe it dragged down SA’s growth in the first quarter.
Yesterday, the world’s second-largest platinum producer reported a 46% drop in gross platinum output in the March quarter, which includes toll-treated material at its smelters, to 230 000oz compared to the same period a year ago.
The unprotected strike in January accounted for more than half of that loss, with 120 000oz lost due directly to the stoppage and a further 21 000oz as Implats mines in the Rustenburg area struggled to return to full production. The financial loss to the company from the strike was well above R2-billion.
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Statistics SA reported yesterday that mining production contracted by 16,8% in the first quarter, mainly due to the strike.
"After a six-week strike at the group’s core Rustenburg lease area mining complex, it came as no real surprise that the group’s production and costs were decimated," JP Morgan Cazenove analysts Steve Shepherd and Allan Cooke said in a note yesterday.
Implats CEO David Brown said yesterday the company’s mines in Rustenburg would return to full production only next month.
The mines were hit by another two-day stoppage related to union rivalry this month, with 3000oz of platinum lost each day.
The company is now verifying how many workers have left the National Union of Mineworkers to join the Association of Mineworkers and Construction Union (Amcu), which until recently had no presence on platinum mines.
Implats said about 10 000 of its total force of 30 000 workers at its Rustenburg operations were not members of any union.
Amcu claimed membership of 8000 workers and wants organisational rights on Implats’ Rustenburg mines.
"Whether this results in Amcu recognition at Implats remains to be seen, but this development arguably points towards more complicated labour negotiations at Rustenburg going forward," SBG Securities analyst Justin Froneman said yesterday.
The process of withdrawing the NUM’s recognition and giving it time to try to reclaim its majority could take up to four months, but Implats was keen to bring the unions into talks to set up a new recognition structure for two or three unions. This would be to avoid a "winner takes it all" situation that could lead to further disruptions, Mr Brown said.
"Platinum mining in SA has rarely, if ever, been more challenging for management and shareholders, in our view," Mr Shepherd and Mr Cooke said.