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Strike talks to continue, deal ‘imminent’

Amcu leader Joseph Mathunjwa says he wants to meet with mine bosses to discuss the latest deal.

Amcu leader Joseph Mathunjwa addresses hundreds of striking mineworkers after the union came a step closer to reaching a wage deal with platinum producers, Marikana, 12 June 2014. Picture: Reinart Toerien/EWN.

JOHANNESBURG - Joseph Mathunjwa, leader of the Association of Mineworkers and Construction Union (Amcu), says he hopes to meet with bosses at the world's three top platinum firms again over the weekend.

He says he will be taking formal feedback from Amcu members workers about a wage offer that could mean the end of the union's crippling five-month strike.

Mathunjwa has been presenting the wage offer to miners at mass meetings in the platinum mines over the past two days and began meetings with the mines this afternoon.

On Thursday, Lonmin, Impala and Anglo American platinum mines said they had reached an agreement 'in principle' with the union, which Mathunjwa would have to take to members for approval.

However, the union later said further demands would be made, such as a quicker increase to basic wages, inflation-related living out allowances, and for over 200 workers fired by Lonmin earlier this year to be reinstated.

Earlier today, though, Mathunjwa said a wage deal remained imminent, telling Talk Radio 702, "At least there is light at the end of the tunnel."

The main outstanding sticking point was whether the wage deal should stretch over three or five years, he said.

"We are in quite a sensitive stage of trying to resolve this and reach an agreement. We won't do things haphazardly."

Bishop Joe Seoka, who mediated talks after the Marikana killings last year, said communities around the Rustenburg mines on the platinum belt, made desperate by the strike, were ecstatic.

"The mood is very jubilant. People are very happy, very excited," he told Reuters.

"Yesterday I could have flown if I'd had wings. If it hadn't happened yesterday, it could never have happened."

Investec Asset Management, a top 10 investor in all three mining companies, said a deal would end a worrying period of uncertainty but the industry faced major challenges.

"We are not out of the woods yet," Hanré Rossouw, Cape Town- based head of resources at Investec, told Reuters.

"There are still some hard questions to be asked about ongoing sustainability of the industry. A large part of the industry is not generating positive returns," he said.

ECONOMY UNDER THREAT

South Africa is home to 80 percent of the world's known platinum reserves and the strike has halted production at mines that usually account for 40 percent of global output of the precious metal.

The cut in production has helped push global palladium prices up 15 percent this year, and platinum prices up six percent, but both have seen bouts of heavy selling over the past two days on signs of a wage deal.

Companies have lost an estimated R22.3 billion since January, while workers have lost nearly R10 billion in unpaid wages, according to an industry website dedicated to the strike.

The industrial action strike dragged the country, widely seen as Africa's most advanced economy, into contraction in the first quarter - the first negative quarter since the 2009 recession.

Mining output fell at the steepest rate in nearly 50 years, pulling manufacturing down with it and putting the economy at risk of a new recession.

Fitch ratings agency changed its outlook on South Africa to negative from stable this morning, partly due to the impact of the strike.

Even more seriously, Standard & Poor's today fully downgraded the country's credit rating from BBB to BBB-, with blame partly going to the strike as well.

In response to the downgrade, Treasury acknowledged the crippling strike's negative impact on the economy and promised to do more to turn the economy around.

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