Industrial strife with the big boys could help PLA if it cuts...

Industrial strife with the big boys could help PLA if it cuts the PGM supply....


UNION DEMANDS
Impala workers demand 20% wage increase
The union also wants a higher starting wage and larger pension fund contributions.

Posted: Tuesday , 09 Jun 2009

JOHANNESBURG (Reuters) -

South Africa's mineworkers union said on Tuesday it wants a wage increase of 20 percent -- more than twice the inflation rate -- for its members at Impala Platinum (Implats) (IMPJ.J: Quote), the world's second biggest producer of the precious metal.

South Africa's inflation rate is at 8.4 percent, and the wage demand could set the stage for tough negotiations in a sector that has been badly hit by the global economic crisis.

Implats said it could not comment on the wage demand because wage negotiations had not started yet.

The wage talks are due to begin on June 17, and a new wage deal is due to take effect on July 1.

The National Union of Mineworkers (NUM) said in a statement it also wants the new wage agreement with Implats to cover one year instead of the usual two years.

Wage talks in South Africa's mining sector are closely watched because if talks fail and workers go on strike any disruption in output could impact metals prices.

"The NUM demands a wage increment of 20 percent from Implats and entry level wages be elevated to 5,000 rand ($610.4 a month) for underground workers," the union's spokesman, Lesiba Seshoka, said.

Underground workers currently earn 3,300 rand a month.

The union also wants Implats to increase its pension fund contribution to 25 percent from the current 16.5 percent, and to put a moratorium on the employment and promotion of white women until there is a balance in terms of racial demographics.

Other union demands included a higher transport allowance, longer maternity leave and fewer working days.

The mining sector has said the union's wage demands are well above inflation, and mining companies say paying out such increases could dramatically raise production costs and jeopardise the long-term survival of the industry.

The country's gold producers are already engaged in wage negotiations with the NUM, and have offered a 6 percent wage increase, but the union has threatened it may go on strike if its demand of a 15 percent wage hike is not met. [ID:nL3110948]

The price of platinum, used in auto catalytic converters to remove pollutants from exhausts, and in jewellery, has tumbled due to the credit squeeze, which eroded demand for cars, leading to big cutbacks on planned capital expenditure and growth projects in the sector, including at Implats.

($1=8.191 Rand)

(Reporting by James Macharia; editing by Simon Jessop)

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