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Following months of negotiations, Sylvania Platinum Limited (LSE:SLP) has agreed to a wage settlement with the National Union of Mineworkers (NUM), which represented the platinum producer’s workers at its Eastern operations in the labour unrest-filled Rustenburg mining district in South Africa, in a bid to pre-empt any potential disruption arising from demands of pay increases.
This is the fifth time a platinum-focussed mining company has increased pay since the beginning of 2012 all related to the growing sentiment of wage hike within the platinum sector in South Africa.
Sylvania has been in talks with its workers’ representatives under the auspices of the Council of Conciliation, Mediation, and Arbitration (CCMA) since the first quarter of this year following industrial actions from neighbouring platinum mines, including world’s second largest platinum producer, Impala Platinum Holdings Limited (LSE:IPLA), which agreed to a 10% increase in wage for its mineworkers in April and a further 4.8% increase last month.
The wage agreement announced today, according to Sylvania, will see an increase of 11.8% in workers’ pay to be covered within the 2013 financial year, however, it does not cover company’s western operations’ workers, who are still in talks, but Sylvania said a similar settlement may be agreed.
Negotiations with the workers in the company’s western operations were disrupted during the previous months as strikes ensued at several platinum mines including the world’s top platinum producers killing over 40 individuals at Lonmin plc’s (LSE:LMI) Marikana operations, ending in a wage settlement, multi billion pound loss of revenue, and a spreading unrest across South Africa’s mining sector.
Sylvania workers, nonetheless, did not engage in strike against its employer but were only prevented from reporting for work as threat to security made the company decide to suspend operations in September in the heat of the industrial within the mining district, home to 80% of the world’s total platinum production.
Production, however, was still affected as Sylvania is in the business of extracting platinum group of metals from tailings and processing them at a neighbouring plant, which was under strike at that time.
The agreement today was hailed by Chief Executive, Terry McConnachie who commented:
“Given the current industrial climate in the country, the fact that a reasonable settlement has been achieved without any loss in production at any of the Eastern Operations is good news for the company and bodes well for the company in these difficult times.”
Shares moved 1.3% to 9.50 pence at 9:30 AM GMT on the Alternative Investment Market in London, following the news.
