Cablegate: Labor Strikes Hit Top Platinum Producers

This record is a partial extract of the original cable. The full text of the original cable is not available.




E.O. 12958: N/A
SUBJECT: Labor Strikes hit top Platinum Producers

1. (U) Summary: Strike action by members of the National
Union of Mineworkers (NUM) began slowly for the top two
platinum producers in the world as talks with management
broke down on October 1. By October 4, NUM had launched a
full-blown strike against Anglo Platinum (Angloplats) and
Impala Platinum (Implats), though the firms and union are
less than two percent apart on their wage demands. While
12,000 of 45,000 mineworkers refused to punch in at
Angloplats, almost all of Implats' 27,000 mineworkers
refused to punch in on October 4. According to press
reports police injured 22 miners when they fired rubber
bullets into a crowd of miners at an Implats roadblock on
October 5. Angloplats says that only 38% of its workforce
belongs to NUM and one-third of NUM members actually showed
up for work on October 4. Implats maintains that the strike
will not affect production for ten days, after which, the
company stands to lose more than $4 million a day in
operating profits. Lonmin Platinum (Lonplats), the third
largest producer of platinum in the world, has not been
affected. Still at issue is money. The unions see high
company profits and want more. Other issues, such as an
increase in the housing allowance, seem to have been largely
resolved. End Summary.

2. (U) Since wage talks began at the beginning of August,
NUM has moved from its initial demand for a 16% wage
increase to 9% for Anglo and 8.5% for Impala. In turn,
Implats has moved from 6.3% to 7.5%, Angloplats from 4.4% to
7.25%. In its previous two-year wage agreement with NUM for
the years 2002 and 2003, Angloplats agreed to a 9% wage
increase for each of the two years, something it was
unprepared to replicate now that inflation is around 5%.
Implats was surprised by the NUM strike, since it had just
entering the second year of a two-year wage agreement. That
agreement calls for a wage increase of 1.4% over inflation,
which would give workers an automatic 6.3% increase this
year. NUM has rejected both the Angloplats and Implats
offers as inadequate, pointing to high platinum prices and
industry profits as justification for a greater share of the
spoils. Five other unions have members working at Implats
and Angloplats, but they have not yet thrown in their lot
with NUM. NUM claims that 47,000 workers are on strike,
while management at Angloplats and Implats claim that fewer
than 40,000 are on strike.

3. (U) According to "Platinum 2004," a Johnson Matthey
publication (British-based Johnson Matthey is the world's
leading trader of platinum group metals, and the sole trader
for Angloplats), South Africa produced 75% of world platinum
in 2003. Of that, Angloplats (2.3 million ounces), Impala
(1 million ounces), and Lonplats (900,000 ounces) accounted
for two thirds - or more than half of world production.
Each has invested in major expansion programs. In addition,
exports from these three companies accounted for 9% of all
South African merchandise exports in 2003.

4. (U) South African platinum group metal resources in the
ground represent more than 85% of the known global resource.
In addition to platinum, South African mines produce 35% and
75%, respectively, of global palladium and rhodium. Other
group metals, such as iridium, ruthenium, and osmium, are
less common. Any disruption in South African production
should have an immediate effect on world PGM prices.
Interestingly, during the week of wage negotiations,
platinum prices actually fell, reflecting a move out of the
market by some Japanese investors, lower than expected
Chinese orders, existing inventories, and the price having
already climbed as investors anticipated the strike. Prices
have returned to pre-strike levels.

4. Table: Platinum Group Metal Prices ($/oz)

Metal September 27 October 5 October 6

Platinum 854 835 850
Palladium 222 216 225
Rhodium 1180 1300 1300
5. Table: World Platinum Production (million ounces)

2002 %Total 2003 %Total Percent

South Africa 4.45 74.5 4.67 74.8 +4.9
Russia 0.98 16.4 1.05 16.8 +7.1
Other 0.54 9.1 0.52 8.4 -3.7
Total 5.97 6.24 +4.5


© Scoop Media

World Headlines


UN: Pope's Visit To Iraq "A Symbol Of Hope"

The visit by Pope Francis to the northern Iraqi city of Mosul at the weekend will be a symbol of hope and an opportunity to join forces for peace and unity, the UN cultural agency, UNESCO, said on Thursday, ahead of his touchdown in the capital, Baghdad... More>>

Myanmar: Military Must Stop Murdering And Jailing Protestors – Bachelet

UN High Commissioner for Human Rights Michelle Bachelet on Thursday said security forces in Myanmar must “halt their vicious crackdown on peaceful protestors,” following another day of deadly violence across the country on Wednesday... More>>

Syria: Economic Decline, Rising Hunger And Surging Humanitarian Needs

Syria’s fragile economy has “suffered multiple shocks” over the past 18 months, with its currency plummeting and joblessness swelling as people struggle to cover their basic needs, the UN Emergency Relief Coordinator told the Security Council ... More>>

Focus On: UN SDGs

Podcast: A UN Top Official’s Inspiring Journey To Leadership

UN Under-Secretary for Global Communications Melissa Fleming speaks to Agnes Kalibata, the Special Envoy to the 2021 Food Systems Summit, about her journey as a woman leader – from growing up as a Rwandan refugee in Uganda to becoming Rwanda’s Minister of Agriculture and now a top official at the United Nations... More>>

UNFCCC: Greater Climate Ambition Urged As Initial NDC Synthesis Report Is Published

UN Climate Change today published the Initial NDC Synthesis Report, showing nations must redouble efforts and submit stronger, more ambitious national climate action plans in 2021 if they’re to achieve the Paris Agreement goal of limiting global temperature rise by 2°C—ideally 1.5°C—by the end of the century... More>>

2021: Critical Year To ‘reset Our Relationship With Nature’ – UN Chief

During this time of “crisis and fragility”, the UN chief told the United Nations Environment Assembly on Monday that human well-being and prosperity can be vastly improved by prioritizing nature-based solutions. Painting a picture of the turmoil ... More>>