Platinum Wage Negotiations

As AMCU, we are busy engaging with employers on wage increases for workers on the Platinum Belt. As the majority trade union in Platinum, we are making good progress.

The employers involved are Implats (including the Impala and Marula operations), Amplats (which comprises Tumela, Dishaba, Central Services, Mortimer Smelter, RBMR and Mototolo operations), as well as the Sibanye-Stillwater SA Platinum (including the RPM and Lonmin operations).

Following our Platinum Collective Bargaining Conference held on 4 June 2019 at the CSIR in Pretoria, we agreed to aim for a minimum salary of R17 000 for the lowest-earning worker. We also agreed to focus on benefits and some broader issues including mine health and safety. 2
During the negotiations we have engaged with our members and our latest adjusted demands are as follows:
1. Basic Salary: a. Category A and B: R1 500 per year, over a 3-year agreement; and
b. Category C and D1: 10% per year, over the 3 years.
2. Basic linked allowances to be paid according to the basic salary.
3. A Housing Allowance of R1 000 per year, over the 3 years.
4. Payment of an RDO (or Rock-Drill Operator) Allowance of R2 500 per year, or R5 per hole drilled.
5. Medical aid to be increased according to medical inflation as at January of every year.
6. Retirement: Migration to the Igula Retirement Fund.
7. Other benefits and conditions of service: a. Maternity leave at 5 months with full pay;
b. Family responsibility leave at 10 days per year;
c. Sick leave allowance to be spread over 60 months;
d. Annual leave to be increased to 40 days per annum;
e. Retrenchment packages at a minimum of R60 000 per employee;
一 f. Long service awards: i. After 5 years of service, an employee should be paid a once-off amount of R2500.
一 ii. 10 years = R5 000
一 iii. 15 years = R10 000
一 iv. 20 years = R20 000
一 v. 30 years = R30 000
一 vi. 35 years = R35 000
一 vii. 40 years = R40 000

一 g. If there is a fatal mine safety incident at a mine, the mine should build a house for the family of the fallen worker; and
一 h. An allowance of R2 000 for multi-skilling, so that mineworkers can acquire other skills to sustain themselves and their families if they are retrenched.

We believe that these demands are realistic in the current environment and to address the socio-economic needs of mineworkers. 3

Current offers by employers

Amplats is currently offering a basic salary increase spread over a 3-year agreement. For Year 1 they offer R1 000, and R800 for Years 2 and 3, to be paid to job grade A and B workers, and 5,5% for each of the 3 years to workers in categories C and D. They offer a 10% increase on the RDO Allowance, and a CPI (or Consumer Price Index)-related increase to medical aid per year. They have not offered anything related to housing.
The offering from Implats currently stands at R800 per year, for each of the 3 years proposed for categories A and B. They offer 5% for C categories, as well as an increase of R100 on Living Out Allowances. For medical aid, they also stick to CPI and has shown a willingness to settle on 5 months’ paid maternity leave.

Sibanye-Stillwater is insisting to have parallel engagements for its operations at Rustenburg Platinum Mine (or RPM, as we refer to it), and the operations formerly belonging to Lonmin. As AMCU, we don’t agree with this approach. For the sake of this briefing, I will refer to the operations as “Sibanye RPM” and “Sibanye Lonmin”:

At Sibanye RPM the current offer for basic salary increases to category A and B workers is R700 for years 1 and 2, and R800 for year 3. They offer 4,3% for category C and D1, for each of the 3 years. They have made no other offers on benefits and conditions of employment.

We are utterly disappointed with the offering at Sibanye Lonmin.
The current offer of R300 for year 1, R350 for year 2 and R400 for year 3 is seen as a slap in the face. It is an insult to workers, and we believe that Sibanye is trying to provoke us into strike. Their offer for category C and D workers is also shockingly low, at a below-inflation rate of 3,3%. Not surprisingly, they were not prepared to look at any other improvements for benefits and conditions of employment.
The struggle continues…

It is important for the public to understand that these mines cannot cry poverty. They make huge profits and pay themselves fat salaries and bonuses, while the poor workers must fight for the crumbs that fall from the table where they dine… 4

Production statistics
Since 2016, when Sibanye diversified to the Platinum Group Metals, the price of rhodium has risen by 300% and the price of palladium by 150%. As at February 2019, rhodium was trading at $2 645 per ounce, palladium at $1 488 per ounce and iridium at $1 460 per ounce.
According to reports, Sibanye Lonmin has returned to profitability with an improved net cash position;
1. Revenue is up $179 million driven by higher PGM prices.
2. Earnings Before Interest, Tax, Depreciation, Amortisation is up to $115 million. This is an improvement of 187,5% from their 2017 earnings of $40 million.
3. Net cash improved to $114 million from $103 million in 2017.
4. Headline earnings per year is up by 160,8% from previous year.
5. The PGM basket revenue realisation is up by 19,7%.
6. Headcount reduction down 21% since 2014, from 36 474 employees (2014) to 30 144 employees (2018) due to LRA s189A retrenchments. This is a reduction of 6 330 employees which amounts to a massive saving on payroll expenses.
7. Production is up by 10% in the same period.
8. Lonmin has for the first 6 months of 2019 generated an unaudited $70 million as compared to the same period in 2018 of $32 million operating loss. This proves that Lonmin was indeed profitable when Sibanye-Stillwater acquired it.

At Sibanye RPM the picture is just as rosy…
The SA Operation PGM basket price in the 1st quarter of 2019 appreciated from $1 073 per ounce in 2018 to $1 221 per ounce in 2019. This is a 13,73% increase.
The PGM basket price of the Rand per 4E (that is Platinum, Palladium, Rhodium and Gold) ounce increase from R12 839 to R17 104 in the 1st quarter of 2019. This is a 33,21% increase.
The South African PGM adjusted Earnings Before Interest, Tax, Depreciation, Amortisation for the 1st quarter of 2019 showed a 33,22% increase from R258,3 million in 2018 to R353 million in 2019. 5

Amplats has delivered a 19% increase in Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA). It is up to $5,5 million for the 1st half of 2019.
1. They boasted a 22% return on capital employed.
2. Revenue is at R42.9 billion.
3. Earnings Before Interest, Taxes, Depreciation, Amortisation (EBITDA) is at R 12,9 billion, a 32% increase.
4. Headline earnings is at R 7,4 billion, a 120% increase.
5. Net cashflow is at R6 billion.
6. Return on Capital Employed (ROCE) is at 45%. In simple terms, this means that they make 45 cents for every one rand spent.

This resulted in dividend pay-out to shareholders increased by a handsome 27%. This is directly related to the hard work of mineworkers, whose productivity doubled during this period.
Amplats has also saved some money over the past years. When it sold RPM to Sibanye-Stillwater in 2015 it made R 4,5 billion. In 2018 it made R1,8 billion from selling its 33% interest in Bafokeng Rasimone Platinum Mine. It also sold its interest in Union Mine to Siyanda Resources.

Implats also boasted what reports call a “financial turnaround” last year, when their earnings more than doubled during the last 6 months from R2,8 billion to R5,9 billion.
1. Revenue is 36% higher at R23,5 billion.
2. Rand revenue per platinum ounce sold increased by 16%.
3. The PGM basket price appreciated from R11 400per ounce to R28 893per ounce for Impala.
4. This is a 153% appreciation in their revenue from 2016 to date.

From 2016 to date, Impala has shed around 8 540 jobs. This includes forced retrenchments, voluntary separations, medical incapacities and natural attrition. This amounts to half a billion rand in savings per year.
Exorbitant levels of executive pay 6

The problem of income inequality in South Africa remains one of our biggest challenges. Even economists agree that inequality is the great enemy of economic growth and prosperity in any country.

In South Africa income equality is even more important, especially in light of our past and the structural wage inequality brought by colonialism and apartheid.

The sad fact is, however, that we still see exorbitant amounts paid to mining bosses while they plead poverty when they have to pay the workers their share of the wealth.

At Amplats, cash incentives to the 2 Executive Directors alone, amounted to more than R11 million last year. Bonus Share Plan payments to the 2 amounted to more than R15 million. This is excluding their basic salaries…
Implats Group CEO Nico Muller earns R10,6 million per year.

The golden handshake paid by Sibanye-Stillwater to the former CEO is estimated at £1.45million (or R27,57 million), and the former CFO received an estimated £737 268 (or R14,52 million).

The total cash paid to Sibanye-Stillwater’s 2 Executive Directors last year amounted to more than R59 million.
Let that sink in…

Way forward
As AMCU, we believe that these mines can truly afford to pay mineworkers a living wage and decent benefits.
As a genuine trade union, AMCU remains committed to working with the mandate of our members, in our quest for social justice and economic emancipation.
We are not like some other yellow unions, where leaders make decisions in in the middle of the night without a mandate and conclude deals with managers in boardrooms and restaurants.
Our decisions are made at the Mass Meeting, and our members determine what we demand and what we achieve!

AMCU believes in a wage-led economy, where workers earning a living wage can spend their hard-earned money and boost the local economy.
We will continue with the negotiations and stop at nothing to achieve the mandate of our members!

7th Commemoration of the Marikana Massacre
On Friday, 16 August 2019, we will gather for the 7th commemoration of the Marikana Massacre. Our gathering will be at the koppie where 34 of our comrades died while peacefully protesting for better wages and living conditions.

2019 National Congress
We are in the final stages in our build-up to our 2019 National Congress next month, to be held on 18, 19 and 20 September 2019.
We have had fruitful engagements with the Registrar of Labour Relations, and we are set to host a successful National Congress to put us in motion for the next 5 years’ term.

AMCU is a genuine trade union and we will continue to strengthen our campaign for the economic emancipation of our members.
I thank you.