Strike likely to halt work at Implats - union
August 27, 2009
By James Macharia
South Africa's miners' union said on Thursday it expected a strike at Impala Platinum to spread to the whole company and to halt operations at the world's No. 2 platinum miner after wage talks broke down.
But Impala (Implats) said the strike was so far still confined to its Rustenburg mine - where more than 20,000 workers went on strike on Monday night.
South Africa produces four fifths of the world's platinum output. Implats alone supplies 25 percent of the precious metal, mainly from its South African operations and mines in Zimbabwe.
The strike at Implats threatens to hurt investor confidence in a sector hard hit by the financial crisis, but has had little effect so far on the price of the metal used in jewellery and in catalytic converters to cut pollutants from car exhausts.
Platinum was unchanged from its close of $1,232.
Analysts said the strike at Implats was not dramatically affecting platinum prices largely because demand for cars was depressed. A strike would have to be wider and much more sustained to have an impact.
"The possibility of the strike action spreading to all of the company's operations over the next few days is great, an injury to one is an injury to all," Lesiba Seshoka, the spokesman for the National Union of Mineworkers (NUM) said.
"It is likely that everybody else can join in, the majority of the branches can join in, we don't need to mobilise them, we had already served a notice of strike and they could join."
But Implats said early on Thursday that the strike was still confined to its Rustenburg mine, where the company says about 3,000 ounces of platinum production are being lost every day.
"Nothing has changed so far," said spokesman Bob Gilmour, while adding that it was possible the strike could spread.
The pay talks broke down after the NUM demanded an increase of 14 percent, having rejecting the company's offer of 10 percent. Implats said the NUM's demand was not negotiable, citing South African inflation at 6.7 percent.
Impala said on Thursday its headline earnings per share had fallen 52 percent in the year ending June 30. It said overall costs had risen 32 percent and that the unit cost per platinum ounce produced rose by 10 percent to 8,526 rand ($1,081).
Above-inflation pay settlements after strikes in other industries and sectors in South Africa, and threats of more stoppages, have added to concerns of inflation pressures. - Reuters
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