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Implats offers miners pay rise

Impala Platinum offers a "pay adjustment" to workers, saying it will add almost 5% to its wage bill.

Impala Platinum Mine. Picture: Implats.co.za.

RUSTENBURG - Impala Platinum mine on Thursday offered workers a pay rise as the South African mining industry struggles to end weeks of labour unrest.

Wildcat strikes are disrupting the country's mining sector - despite the end of an illegal six-week stoppage at another platinum producer, Lonmin, in which 46 people were killed.

In a bid to avert a strike, Impala Platinum offered a "pay adjustment" to workers demanding an increase, saying it would add almost five percent to its wage bill.

Workers had originally demanded a 10 percent wage hike.

There was a heavy police presence in the area Thursday afternoon with armoured vehicles and a water cannon on standby while a helicopter hovered above.

Thousands of workers gathered in an amphitheatre near Implats' Rustenburg mine to listen to Association of Mineworkers and Construction Union (AMCU) leaders.

"Management adjusted all salaries across the board. We didn't get the 10 percent we wanted, but we got something we can work with. We will continue talks with management next week. We will not go on strike while we are talking," Khayalethu Mzimeli, an AMCU representative, told Reuters after the meeting.

African National Congress outcast Julius Malema, a populist who has backed the wildcat strikes and called for the nationalisation of South Africa's mines, was due to address Implats workers to encourage them to press for higher wages, but failed to show.

Malema, the former head of the ruling ANC's Youth League who was ousted from the party for ill-discipline in April, is said to be exploiting anger among miners to revive his political career and his campaign to unseat President Jacob Zuma.

South Africa is home to close to 80 percent of the world's known reserves of platinum, the white metal used in catalytic converters that reduce exhaust emissions from cars, but the industry is grappling with soaring costs and weak demand.

Implats is regarded as the most profitable of the big producers, but analysts say there are limits to what it can offer.

"Implats has traditionally been better managed but would need to be careful to ensure their costs don't edge too high," said Rezco Asset Management investment director Rob Spanjaard.

The impact of the strikes on Africa's largest economy was highlighted on Thursday by a Moody's Investor Service downgrade, which pulled South Africa's government bond rating down one notch, citing violence and illegal strikes at the mines.

An illegal stoppage at Implats would have brought the labour unrest full circle this year the same way its Rustenburg operation was brought to a halt for six weeks in January and February amid a bloody union turf war between the militant Amcu and the dominant National Union of Mineworkers (NUM).

Close to 75,000 workers are on strike or being prevented from going to work in South Africa's mining sector, including at mines run by the world's third and fourth biggest bullion producers, AngloGold Ashanti and Gold Fields.