Today saw the long awaited wage agreements between Anglo American Platinum (Amplats), Lonmin and Impala Platinum (Implats) and the Association of Mineworkers and Construction Union (Amcu) signed, bringing an end to a five month strike action.
The strike is estimated to have cost South Africa’s platinum industry an estimated R24bn in revenue and employees’ earnings of approximately R10.6bn. All employees are expected to return to work on Wednesday the 25th of June 2014.
The new wage agreements are effective retrospectively from 1 July 2013 in the case of Amplats and Implats and from October 1 2013 in the case of Lonmin and will be renegotiated in two year’s time in June 2016. This backpay will be received within 1 week of their return to work from 2013 until 22 January 2014, the day prior to the start of the strike.
Employees earning a minimum of R12,500 per month will receive an 8.5% increase in the first year and 7.5% in the second year. In the case of Lonmin however, employees will receive 7.5% increase for the next two years.
With respect to the living out allowance, this was left unchanged, but Amplats’ allowance is expected to rise by 6% in the first year and remain unchanged thereafter.
This five month strike is the third longest strike in the world and has impacted GDP growth in the country and was a critical factor in the decision to lower South Africa’s investment credit rating. The strike may have ended, but South Africa has a lot of work to do in order to regain investor confidence.