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'Platinum producers may not survive'

Analysts warn that some companies may not be able to survive the cost of the strike.

Around 70,000 Amcu members have been on strike on the platinum belt since 23 January. Picture: Vumani Mkhize/EWN.

JOHANNESBURG - Talks to end the four-month platinum strike are continuing this week but mining analysts have warned that two of the three companies which have been affected may not be able to survive the cost of the work stoppage.

Around 70,000 Association of Mineworkers and Construction Union (Amcu) members have been on strike at Lonmin, Impala Platinum (Implats) and Anglo American Platinum (Amplats) since 23 January, demanding a basic salary of R12,500 a month.

Since then, the companies have revised their nine percent offer to meet the miners demands by 2017, but there is still uncertainty around demands for better housing and maternity leave.

Mining analyst Peter Major says Amplats is a sub-division of a bigger mining house and will survive the loss in production, but Implats and Lonmin may not be as fortunate.

"This is a very important division for Amplats, but their other operations will carry them. However, Implats is a standalone company and Lonmin is pretty much a standalone company and their shareholders have now lost money for the past 10 years. The shareholders aren't going to keep lending the mines money to lose money."

Amcu and platinum producers have been locked in talks mediated by a Labour Court judge for over a week in an attempt to end the crippling strike.

The protracted strike has been largely blamed for a slowdown in South Africa's economic growth during the first quarter of this year.

Several deaths and claims of intimidation have also tainted the strike in recent weeks.

An inter-ministerial task team was set up earlier this week by newly appointed Mineral Resources Minister Ngoako Ramathlodi who says his first priority is to resolve the dispute.

NUM TELLS MEMBERS TO DEFEND THEMSELVES

The National Union of Mineworkers (NUM) says it has no other choice but to tell its members to defend themselves against attacks on the platinum belt, as the strike continues.

NUM had initially told its members working at shafts where Amcu was on strike to stay at home out of fear of being attacked.

But the union says its members are now receiving final warnings from their companies and are at risk of being dismissed .

The NUM's Frans Baleni said, "They are being attacked on their way to work or in their homes. We are saying that they've got a right to life and they therefore must defend themselves."

ALLEGATIONS OF POSSIBLE TAX EVASION

Meanwhile, shocking allegations of possible tax evasion have emerged out of the wage dispute.

On Thursday, a union negotiator told the Cape Town Press Club the platinum companies involved might be guilty of tax and wage evasion, although he didn't have proof.

Brian Ashley said Amcu would reveal more next week.

"We think, although we cannot prove it at this moment, that this has got to do with a process of transfer pricing or worse, mis-invoicing, which is an illegal offence. This mis-invoicing or transfer pricing perhaps has something to do with several subsidiaries that these companies have in what are known as tax havens."

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