British platinum producer Lonmin Plc‘s offer of 900 rand ($112.50) wage increase to 5,500 rand ($688) for entry-level workers has been rejected by leaders of the striking miners, shattering hopes of a breakthrough that would end a five week strike at the firms Mairkana mine in South Africa.
“Lonmin is offering to adjust the rate of entry-level (workers) from 4 600 rand towards 5 500 rand, an increase of about 900 rand. Then all operators will be upgraded, by one grade up,” National Union of Mineworkers general secretary Frans Baleni told the BBC World Service radio Newsday programme.
“It’s very far,” added Baleni.
The miners are demanding a basic pay hike to 12,500 rand ($1,560) . A total of 45 people have died since the Lonmin strike started last month, 34 of whom were shot and killed by police.
Miners unrest in South Africa has spread to nearby shafts belonging to UK headquartered Anglo American Platinum, which has since shut down its Rustenburg platinum operations. The company produces around 40 percent of global platinum output.
“We have taken this decision to suspend our operations in order to help ensure the safety of our employees – our absolute priority, ” said Cynthia Carroll, Chairman of Anglo American Platinum.
Anglo American is the single largest private-sector employer in the country with about 76,000 employees. The UK-listed firms employees are demanding wage increase to 16,070 rand ($1,950) a month.
Miners yesterday threatened to bring the mining industry ‘to its knees’.
“By the evening of Sunday all the mining industries in Rustenburg will be on its knees,” said Mametlwe Sebei, a speaker from the Democratic Socialist Movement party addressing about 5,000 people who gathered at a sports stadium at Anglo American Platinum’s Rustenburg complex yesterday.
The halted production at some of the worlds leading platinum producers in South Africa has pushed the metals’ price up by nearly 20% in the last one month due to supply fears. South Africa produces about 80% of the world’s platinum output.
“Platinum’s rally is very strike-specific at this point, and it may pull back when the supply worries are over as platinum is now getting significantly overdone,” Frank McGhee, head precious metals trader Integrated Brokerage Services LLC told Reuters.
Lonmin, which is the the world’s third-biggest platinum producer is loosing 2,500 ounces of platinum every day. The strike at Marikana removed about 60,000 ounces of platinum from the market in the last one month.
Estimates indicate that Anglo American loses 2,100 ounces each day it is shut.
The wildcat strikes have also extended beyond platinum, with about 15,000 gold miners at the Gold Fields Limited‘s KDC West mine on strike. The company is said to be losing losing 1,440 ounces daily.
President Jacob Zuma has vowed to rein in on the growing unrest gripping one of the country’s key industries. The strikes have elicited investor fear and panic among investors and threatens thousands of jobs.
Unrest in the three mines are estimated to led to losses totaling 1.4 billion rand ($170 million) or about 100 million rand ($12 million) every day for the mines.
Zuma told lawmakers he had directed relevant ministers “to discuss how do we deal with this issue and very, very soon we will be able to let the public know because it can no longer be accepted.”
Zuma also took a hit at Lonmin, describing the living and working conditions of Lonmin miners as “terrible”.