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Anglo American Platinum (Amplats), a subsidiary of London-based Anglo American plc (LSE:AAL) and top supplier for the world’s demand for platinum, has offered to reinstate the 12,000 employees it dismissed less than three weeks ago, following a loss of over a hundred thousand ounces of the precious metal since the strike ensued at its mines.
Amplats made the decision following a dialogue with representatives of the three unions acting on behalf of their members, who has not been earning since they stopped showing for work about six weeks ago.
In a statement released today, the meeting “focused solely on exploring options of ensuring striking employees return to work” and did not include any wage negotiations but the company said it will offer “hardship” and “loyalty” allowances to the employees who participated in the strike.
A hardship allowance of 2,000 South African Rand (£143), net of tax, is being offered to the striking employees, who did not earn a penny since they participated in the strike six weeks ago, while those who did not participated in the strike but were not able to report to work were offered a “loyalty” allowance of the same amount.
The mines operate on a “no work, no pay” policy and thus an additional advance payment of R2,500 (£179), deductible from employees’ salaries starting January 2013 over a six-month period was also offered.
Amplats, however stated, “the offer is strictly subject to all striking employees returning to work and doing actual work/activities as required by the company from Tuesday, the 30th October 2012.”
No further wage negotiations were discussed during the meeting attended by National Union of Mineworkers (NUM), National Union of Metalworkers in South Africa (NUMSA), and United Association of South Africa (UASA), who all accepted the one-off remunerations offered by Amplats to the table.
“Employees will return to work on the same terms and conditions of employment as applied before the illegal industrial action commenced and will receive a final written disciplinary warning,” Amplats declared, saying those who will not report for work on the date set will be dismissed subject to appeal and will not be eligible for the allowances presented.
Exhausting All Avenues
Chris Griffith, Chief Executive of Amplats said the latest move by the company to reach out to its striking and dismissed employees “provides a sound basis to return to work and for the company to return to full operations”.
The strikes took a huge chunk out of Amplats potential revenue for the year. According to the company, it lost some 42,000 ounces of platinum during the July to September period and a further 96,000 ounces in October to date, hence an effort to reach out to its employees beyond Amplats management’s own deadline has to be carried out.
After all, 138,000 ounces of the precious metal is worth over US$200 million based on today’s current pricing, and the company will not risk losing as much or even more if it cannot find workers to drill and chip the mines at South Africa’s mineral rich Bushveld complex.
Back at the City, shares were down 2.1% to £18.92 following the announcement.
