South Africa Labor Court to Mediate Fresh Platinum Strike Talks

JOHANNESBURG--South Africa's labor court Tuesday intervened in the 17-week long platinum strike and said it will mediate fresh talks between the mining companies and the union to try to end the stalemate which has cost the industry $1.8 billion in lost revenue.

Around 70,000 platinum mine workers have been on strike since the end of January to demand a near tripling in their salaries. Production at the three largest platinum producers--Anglo American Platinum Ltd., Impala Platinum Holdings Ltd. and Lonmin PLC--has come close to a standstill.

On Tuesday, the companies said in a joint statement that they will begin a fresh round of mediated talks with the Association of Mineworkers and Construction Union starting Wednesday, this time through the country's Labor Court. Representatives from the union AMCU didn't respond to requests for comment. The court will oversee the talks for three days.

The companies said they want to end the strike through a settlement with the union. Lonmin chief executive Ben Magara said Monday that the company is also looking at its legal options if a wage agreement isn't reached. In the first hit to jobs, Lonmin dismissed 235 employees Monday deemed essential service workers who aren't allowed to strike under South African labor laws and hadn't shown up for work since the strike started.

Intimidation around the mines remains high, the companies have said. Earlier this month, four people were killed near the Lonmin mine.

AMCU president Joseph Mathunjwa has demanded that companies raise entry level salaries from around 5,000 rand a month ($477) to ZAR12,500. The companies say they cannot afford that because even before the costly strike, over half of the platinum mines weren't making a profit. Mr. Mathunjwa has said if chief executives can be paid ZAR15 million a year, then his members should get a pay rise.

Lonmin said it has lost a third of its annual output so far and that a restructuring of its mines is now almost inevitable, which could lead to more job cuts.

Write to Devon Maylie at [e-mail]