Lonmin Workers Get 11-22% Wage Increase

VENTURES AFRICA – Following six-weeks of violent strikes, a settlement has been agreed at the Lonmin mining plant, prompting Lonmin shares to soar, amid worries that the high terms agreed may initiate dissatisfaction at other South African plants.

The South African Lonmin mining operation ranks as the third largest platinum plant in the world, and over the past six weeks has seen increasingly violent strikes and protests from miners, in a bid to achieve a doubling of salary figures. The strikes saw over 40 people killed in the unfettered violence that took over the Marikana-based plant, with the plant losing 42 working days as the labour-force downed tools stopping production.

Under such pressure and global attention, workers and employers alike have been locked in negotiations to reach a salary package agreement acceptable for all.

The terms of the agreement have now been disclosed: underground workers will earn 9,611 rand ($ 1,171), up from 8,164 rand ($ 995). Winch operators will see their salary rise from 8,931 rand ($ 1,089) to 9, 883 rand ($ 1,205), while rock drill operators will receive 11,078 rand ($1,351) a month, up from 9 063 rand ($1,105). Production team leaders will see the highest salary level, earning 13,022 rand ($ 1,588) increased from 11,818 rand ( $ 1,441). The agreement also provides for housing and medical assistance for employees.

All workers will be receiving a one-time 2,000 Rand ($ 243) bonus should they return to work by Thursday morning.

With the agreement reached late last night, the Johannesburg Stock Exchange witnessed an immediate peak in Lonmin stock prices, with shares opening this morning at 94.32 Rand ($ 11.50) showing a 9.03 per cent increase.

However, speculation has already begun as to what this 11-22 percent wage increase means for the mining sector in general, with fears being voiced that the substantial increase may prompt rebellion from other dissatisfied miners. Indeed, a spokesman for the Association of Mineworkers and Construction Union (AMCU) at the Impala Platinum plant has already spoken to interviewers stating: “We want management to meet us as well now. We want 9,000 rand ($1,100) a month as a basic wage instead of the roughly 5,000 Rand we are getting”.

Analysts at JP Morgan have also released a research note, adding to speculation on what is in store for the mining sector with their opinion that: “The outcome of the negotiation at Marikana will likely set a new benchmark for mining more generally and wage costs are set to rise substantially”.