Labor unrest among South African miners continues to spread. Miners at Anglo American Platinum’s (Amplats) Union mine in Limpopo refused to go underground and presented a list of demands to management this week. The company has obtained an injunction against the employees and is calling the action illegal. In 2011, the Union mine produced more than 250,000 oz of platinum.

The situation at the company’s Rustenburg mine has worsened to the point that company advised employees not to report for work. Disciplinary action is continuing against employees who have been on strike. Last week, employee attendance rate at the Rustenburg mining operations remained below 20%. “Despite repeatedly urging our employees to come back to work, attendance at our Rustenburg operations remains low,” said Chris Griffith, CEO, Anglo American Platinum. “We have been left with no choice but to initiate disciplinary action, which could lead to dismissals.”

Labor strife has also hit Atlatsa Resources, which recently reported unrest at its Bokoni platinum mines operation, according to Johnson Matthey. Yesterday, the Labour Court awarded Atlatsa Resources and partner Amplats an injunction against striking workers at Bokoni. Management said they would not negotiate with the striking miners outside of the formal channels.

Meanwhile workers at AngloGold Ashanti’s South African operations continue with an unprotected strike. Workers at the West Wits and balance of the Vaal River Regions’ operations joined those at Kopanang, who embarked on an unprotected work stoppage September 20. This interruption to normal mining and processing operations comes amid disruptions elsewhere in South Africa’s gold and platinum mining sectors.

Discussions are being held with representative trade unions on an industry-wide basis through the Chamber of Mines. No formal demands have yet been presented to management by the striking workers.

The Chamber of Mines, which represents South Africa’s three largest gold producers in the sector’s wage bargaining forum, reaffirmed its commitment to maintaining the integrity of the sector’s collective bargaining process.

Speaking on behalf of Gold Fields, AngloGold Ashanti and Harmony Gold Mining Co. Ltd., the Chamber noted criticism by the Congress of South African Trade Unions (Cosatu) and the National Union of Mineworkers (NUM), of ad hoc wage adjustments reached by certain non-gold companies outside of normal bargaining processes. The collective bargaining forum for gold has provided a stable climate for investment and has delivered improved working conditions and wage increases that have beaten inflation by about 40% since 1994.

The current wage agreement, in place since July 1, 2011, provided for annual wage increases of between 8% and 10% for all union employees of these companies on July 1, 2012 as well as July 1, 2011. This compares with current consumer inflation of 5% in August2012 and average inflation of 5.3% since the agreement came into effect.

These increases have come against the backdrop of sharply higher electricity prices and other input costs, falling grades across most operations and increasing depths on these underground mines. Additional salary increases as demanded by the unlawful strikers, could result in substantial job losses and even the closure of some of the more marginal shafts in the industry.

The Chamber said it is committed to engaging constructively at future meetings between the Chamber and the recognized unions, but must be clear that the on-going unlawful strike are not conducive to positive progress.

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