JOHANNESBURG: South Africa’s radical AMCU union on Friday said that it had agreed in principle to a deal to end the country’s longest-ever mining strike, a day after platinum producers announced the agreement.
“In principle we have agreed to the offer,” Joseph Mathunjwa, the leader of the Association of Mineworkers and Construction Union, told the SAPA news agency.
“There are still issues that we need to consult with the employer,” the agency quoted him as saying.
A local union leader said earlier the conditions include the rehiring of a group of workers who were fired in April after striking illegally.
Mathunjwa’s comments came a day after South Africa’s three main platinum producers — Anglo American Platinum, Impala Platinum and Lonmin — said that they had struck a deal in principle that union leaders would now take to members for final approval.
The strike at South Africa’s platinum mines began in January, when tens of thousands of workers downed tools demanding higher wages, and has crippled the sector.
The new wage offer for lowest-paid workers includes a 1,000-rand ($90, 70 euro) raise in monthly salary for two years, then 950 rands for the following three years, according to a statement from Impala Platinum.
The deal would be backdated to July last year for Implats and Amplats, while Lonmin would implement the raises from last October.
This would practically double the current minimum wage of 5,500 rand to 10,500 rand ($980, 720 euro) by July 1, 2017, and effectively preempt further strikes for the next five years.
Other worker categories would get an 8.0-percent raise for 2013 and 2014, then 7.5 percent the next three years.
“Our proposal is basically for a 1,000 rands a month for five years, Implats spokesman Johan Theron told AFP.
“But the feedback we are receiving from the mass meetings is that they are saying perhaps they only want the first three years and maybe not all the five years.”
This would suggest the workers might consider a fresh strike and negotiations within three years.
The offer would fall short of the 12,500 rand ($1,160, 860 euros) the workers demanded, a figure used as rallying cry over the past two years that propelled AMCU to prominence.
The employers were still awaiting AMCU’s official response, said Theron.
The five-month work stoppage helped push the country’s economy into contraction in the first quarter of this year, the first time since the global economic crisis five years ago.
South Africa holds around 80 percent of the world’s known platinum reserves, and platinum group metals raked in 9.0 percent of export earnings last year.
The Fitch ratings agency on Friday revised South Africa’s outlook to negative from stable, and affirmed its credit rating at “BBB”, near the bottom of the investment-grade scale. partly because of the effect that the strike has had on the economy.
Fitch said South Africa’s outlook for growth had deteriorated after a 0.6-percent contraction in the first quarter of this year, and it revised its 2014 GDP growth forecast down to 1.7 percent from the 2.8 percent that it issued during the last country review in December 2013.
The agency said that the government “faces a challenging task to raise the country’s growth rate and improve social conditions, which has been made more difficult by the weaker growth performance and deteriorating trends in governance and corruption.”
“This will require an acceleration of structural reforms,” it said.
The agency also voiced concern over President Jacob Zuma’s new cabinet, appointed after general elections last month returned his African National Congress to power and secured him a second term in office.
“In Fitch’s view, the track record of some key ministerial appointments and shortcomings in administrative capacity mean this is subject to downside risks.”
The country’s Treasury noted that the government is aware of the “challenges South Africa faces.”
It said the government has “prioritized” an ambitious National Development Plan which will kickstart the economy and reduce poverty by 2030, notably through major infrastructure projects.
The program was approved in 2012, but implementation has been piecemeal in the face of fierce opposition of left-leaning government allies, which brand it too neoliberal.