Ramaphosa faces early test as platinum miners face off with labour unions

The world’s biggest platinum mining companies will meet with South Africa’s labour unions this month to negotiate a three-year wage deal, in one of the first tests of Cyril Ramaphosa’s new presidency.

Ramaphosa’s African National Congress (ANC) clinched South Africa’s general election last week by its smallest margin since 1994, after which the President said the party’s low score was due to voters expressing frustration.

Tensions are also rising in the platinum sector on both sides and there are fears that an unamicable outcome from the wage talks this month will see the labour unions go on strike, which could send platinum prices soaring.

The industry is bracing itself for a tough round of talks, with the Association of Mineworkers and Construction Union (Amcu) expected to push for higher wages as the industry reaps windfall profits.

The negotiations will put Amcu – the largest and most militant labour organisation in the sector – and three other unions against at least seven producers, including Anglo American Platinum and Sibanye Gold.

Three years ago, wage negotiations went relatively smoothly after Anglo American Platinum was first to agree a deal with Amcu, however some producers are yet to recover from the 2014 strike, which cost about US$2 billion in revenue.

“Ramaphosa’s key priority is to send a positive signal on reforming economy, but there will be high levels of instability after the election,” said Andre Duvenhage, professor of politics at North West University. “The platinum belt is probably the most volatile environment in South Africa.”