South African strike leads to lawsuit

Last updated 09:00 17/02/2014

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Anglo American Platinum said on Sunday it was suing South Africa's Association of Mineworkers and Construction Union (AMCU) for 591 million rand ($65 million) in damages it said resulted from ongoing strike action by AMCU members.

AMCU-affiliated workers downed tools over three weeks ago at Amplats, the world's number one platinum producer, and also at rivals Impala Platinum and Lonmin in a sector-wide stoppage over wages that has again rattled business confidence in Africa's largest economy.

"There are increased costs to pay protection services staff overtime, damage to property, and losses occasioned by the loss of production because non-striking workers are being prevented from going to work," Amplats spokeswoman Mpumi Sithole told Reuters.

"There is evidence of illegal actions of violence and intimidation and breaching of the picketing rules," she said.

AMCU president Joseph Mathunjwa told public broadcaster SAFM that Amplats was "trying to break the strike."

Sithole said the Amplats lawsuit papers had been filed on Friday at a regional high court in Pretoria, but she could not say when the case would start being heard.

AMCU spokesman Jimmy Gama said the union had not received the papers yet and could not respond until it did. The union has always denied allegations that it uses intimidation.

An AMCU shop steward was killed in a clash with police at an Amplats mine on February 7 and the company said at the time that the strike was becoming violent and that several of its vehicles had been damaged.

AMCU has emerged as the dominant union on South Africa's platinum belt over the past two years after poaching tens of thousands of members from the National Union of Mineworkers (NUM), which is allied to the ruling African National Congress.

The vicious union turf war erupted into violence in the platinum sector last year and has killed dozens of people.

In August 2012, police shot dead 34 striking AMCU miners at Lonmin's Marikana mine, South Africa's bloodiest security incident since the end of apartheid in 1994.

The killings spooked investors and hit the country's credit ratings.

The current platinum strike, which has affected over 40 per cent of global production of the metal used in emissions-capping catalytic converters in automobiles, has cost companies about 175,000 ounces of lost output to date, according to South Africa's chamber of mines.

There is no immediate end in sight with the two sides far apart on the issue of wages. AMCU is to meet with a government mediator on Monday but there are no direct talks scheduled between the union and companies.

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AMCU is demanding a more than doubling of basic pay to 12,500 rand a month under the battle cry of a "living wage."

Companies say they can ill afford this as they confront rising costs and depressed prices. They have offered increases of up to 9 per cent against an inflation rate of 5.4 per cent.

If Amplats was successful with its damages lawsuit, this could bankrupt AMCU, which claims over 100,000 members.

Given the average wages in the sector at the lower end of the pay scale where AMCU dominates, the union probably has between 5 and 6m rand a month flowing into its coffers from membership dues.

- Reuters

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