South African Platinum Union Says Strike Will Continue

By Devon Maylie

JOHANNESBURG--South Africa's biggest platinum union said Thursday that a strike will continue until companies make a better wage offer, as labor unrest threatens the country's already fragile economy.

Workers at the country's largest platinum mines have been on strike since Jan. 23 demanding higher salaries, costing the country and companies billions in lost revenue.

"Ours is a fight for survival and we will see it through," said Joseph Mathunjwa, president of the Association of Mineworkers and Construction Union.

The union wants salaries increased to a minimum of 12,500 rand ($1,243) a month from current entry level wages of around ZAR5,000 a month. The companies have offered a 9% increase.

The union's comments come a day after the world's three biggest platinum producers said they won't meet the demand and that the strike has already cost the industry a combined ZAR4.4 billion in lost revenue.

"Prolonged strike action will result in more losses, in further fundamental restructuring and, inevitably, this will have a negative impact on jobs and indeed the economy," the chief executives of Impala Platinum Holdings Ltd. and Lonmin PLC said Wednesday in a joint statement.

The world's largest platinum producer, Anglo American Platinum Ltd., said earlier this month that the company is looking at ways to mechanize mining more amid the increased labor unrest, and that it could shut off mines.

The strike is hurting South Africa's already weakened economy. Revenue from mineral exports accounts for more than half of total export revenue. President Jacob Zuma last week urged companies and unions to find a solution to the strikes but the union's comments and the companies' stance show a resolution will be difficult.

Mr. Mathunjwa on Thursday said that chief executives should cut their salaries to save their mines.

"Our people are worse off today than they were in 1994," he added.

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