The three largest platinum (NYSE:PPLT) companies and the main union at their South African mines signed a deal to end a crippling five-month strike after the labor group’s members accepted pay proposals from producers.
Anglo American Platinum Ltd. (LON:AAL), Impala Platinum Holdings Ltd. (JSE:IMP) and Lonmin Plc (LON:LMI) each signed three-year agreements with the Association of Mineworkers and Construction Union today, they said in separate statements. Employees are expected to return to work tomorrow, they said in a joint statement.
“It is our sincere hope that our companies, our industry, our employees and all other stakeholders will never again have to endure the pain and suffering of this unprecedented strike period,” the chief executive officers of the three producers said in the joint statement. “The road ahead remains a challenging one and it will take some time for our operations to resume full production.”
The stoppage by at least 70,000 miners cost the companies 23.9 billion rand ($2.2 billion) in revenue and workers 10.6 billion rand in wages since Jan. 23, according to the producers. The deadlock pushed South Africa’s economy into contraction in the first three months of this year as mining production plunged. Today’s agreement applies until June 30, 2016.
Thousands of strikers shouted out their approval for the offer yesterday at a mass rally held by the AMCU at a stadium in Rustenburg, 120 kilometers (75 miles) northwest of Johannesburg.
Lonmin declined 1.8 percent at 2:18 p.m. in London, paring yesterday’s 4.5 percent advance after the outcome of the union’s rally. Impala fell 0.4 percent in Johannesburg, after adding 1.1 yesterday, while Amplats, as Anglo Platinum is known, dropped 1.8 percent after yesterday’s 1.6 percent gain.
Palladium for immediate delivery advanced 1.1 percent to $831.05 an ounce, while platinum, used to make jewelry and devices that reduce harmful emissions from vehicles, gained 1.1 percent to $1,472 an ounce. South Africa accounts for about 70 percent of all the platinum mined globally.
South Africa’s credit rating was cut on June 13 to one level above junk by Standard & Poor’s, which cited the country’s longest and costliest mining strike as among reasons for the assessment. The rand strengthened 0.7 percent against the dollar yesterday after the union’s meeting.