Reuters reported that Industrial unrest at South Africa's platinum mines resulting in the death of workers at Implats and rival Lonmin is increasing the risks facing the sector as it grapples with low prices and rising costs.

Mr Terence Goodlace newly installed chief executive of Implats said that "We are walking a tightrope. These developments pose a significant risk to the industry. At this point we believe we have a measure of stability but it is unreasonable to say nothing will happen to us."

The South African platinum industry has been hit by a wave of labor unrest, first at Implats' Rustenburg operations at the start of this year and more recently at Lonmin which led to police killing 34 striking miners in a hail of bullets last week. The violent 6 week strike at Rustenburg sliced 21% off the company's production for the full year.

A bitter turf war between the dominant National Union of Mineworkers and the Association of Mineworkers and Construction Union has threatened to spread across the platinum belt.

The NUM said that workers had returned to a mine operated by Royal Bafokeng Platinum after a stoppage on Wednesday.

Mr Goodlace said that the world's largest platinum producers are discussing a move to collective bargaining. The platinum sector currently negotiates with unions on a company by company basis, leaving individual firms open to labour discontent as rival organizations promise workers they can cut better deals. This situation has also created wage disparities between platinum companies that do not exist in the gold and coal sectors which bargain collectively, fueling resentment.

Source - Reuters

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