Wage talks between mining companies and unions are taking place across South Africa at the moment, with the platinum industry keenly watching developments.

Unions are demanding double-digit increases in wages for their members, but the platinum miners have so far stood firm and are offering well below that rate.

The stand-off has led to fears of potential strike action taking place across the country, which would seriously hit the supply of platinum production and could threaten the tight supply and demand balance.

The world's largest platinum producer, Anglo Platinum, wants a three-year contract and is offering unions a pay increase of seven per cent. However, the trade unions are only happy to commit to a one-year deal and are demanding a 15 per cent wage hike.

Meanwhile, the world's second-largest producer, Impala Platinum, has until the end of this month before the current deal runs out but has so far failed to submit a wage offer, according to unions. As such there is the threat of strike action as unions, which are also demanding a 15 per cent increase in wages, have declared a dispute.

At Lonmin, the Solidarity Union is threatening to strike amid concerns surrounding overtime arrangements. Lonmin's current wage contract runs until September, meaning the platinum miner has not yet begun wage negotiations with the unions.

Sources:

Solidarity weighs strike action against Lonmin, 21/06/07
http://www.businessday.co.za/articles/national.aspx?ID=BD4A498084

South African mining sector wage talks, 20/06/07
http://investing.reuters.co.uk/news/articleinvesting.aspx?type=allBreakingNews&storyID=2007-06-20T112049Z_01_L20356141_RTRIDST_0_SAFRICA-MINING-LABOUR-FACTBOX.XML

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