Mining wage

Amplats and Labor Reach Historic Wage Deal

AMCU and other unions have reached a five-year wage agreement with Amplats.

  • The unions and the platinum miner have signed a historic five-year pay deal.
  • Workers will receive a pay rise of 6.6% on average from July.
  • The agreement includes a profit-sharing agreement, a housing program and a clause to reopen talks in certain circumstances.

Anglo American Platinum and the unions have signed a pay deal that could set the bar for the rest of the industry, where talks are ongoing.

At a signing ceremony on Thursday, Anglo American Platinum signed a five-year pay deal with three unions. These include the Association of Miners and Construction Union (AMCU), National Union of Miners (NUM) and UASA.

The wage agreement increases wages and wage-related allowances, which will increase the company’s total labor costs by an average of 6.6% per year over the five-year period.

Amplats’ lowest paid employees will receive an annual base salary increase of 7.5% or R1,150 in the first year, increasing to 7.5% or R1,500 in the fifth year.

Supervisor-level employees will see their base salary increase by 6% in the first through third years and 6.5% in the fourth and fifth years.

The medical aid contribution will increase by 7% per year. With the increase in base salary, all other salary-related allowances and bonuses for employees will also increase accordingly, including pension contributions. Housing allowances will also increase.

Unions have said the deal can be reviewed if inflation rises above a certain level.

This is the first wage agreement that spans five years. It is also the first time that an agreement has been reached after only five meetings.

Sitting alongside the unions, Natascha Viljoen, CEO of Amplats, said a new paradigm in the mining industry had been created by this “collective breakthrough in the way we look at wage negotiations”.

The agreement was reached in a “collaborative and constructive” manner, she said, indicating that the pay deal will be implemented from July.

The agreement is expected to set the tone for wage negotiations with other platinum mining companies in South Africa.

Wage negotiations at Impala Platinum are ongoing, while talks in Sibanye-Stillwater’s platinum business will begin next week.

Relations between Sibanye and the unions are strained as a strike at the company’s gold mines has been going on since March 10 with no sign of a settlement so far.

The AMCU and NUM are demanding a R1,000 raise each year to a three-year wage deal – a deal workers have won at Harmony and other gold mines. Sibanye argued that giving in to such demand is not sustainable for its marginal gold operations and will hasten the closure of these mines.

Meanwhile, platinum operations have been very profitable thanks to exceptionally high metal prices. It also boosted the company’s share price, resulting in a controversial compensation package of over R300 million for Sibanye CEO Neal Froneman.

At Thursday’s signing ceremony, AMCU Chairman Joseph Mathunjwa said the mining industry was a complex space to trade in as a price taker subject to global trends.

Moreover, he said that collective bargaining had failed in South Africa. “We end up as unions negotiating the social wage – which is what the government should be doing,” he said, noting that medical and travel costs were part of workers’ wage demands.

Since the workers initially demanded a 13% pay rise, NUM chairman Daniel Baipile said the union was not entirely happy with the pay deal with Amplats but had agreed to make a compromise.

“It’s a give and take,” said UASA’s Franz Sterhing. “This agreement is not just a raise, it is the cornerstone that will allow each of our members and the employees of the company to lead a decent life.”

* Changed to penultimate paragraph to reflect initial request of 13% of workforce.