Tens of thousands began returning to South Africa’s platinum mines on Wednesday, following the longest, costliest walkout in the history of the continent’s No. 1 platinum mines; since January, the strike impacted 40% of the precious metal’s global production.
In all, the action cost top three producers Lonmin plc, Anglo American Platinum and Impala Platinum $2.25 billion in revenue after 70,000 dropped their tools in January, analysts said. Meanwhile, according to company officials quoted by Reuters, a full production return could still take three more months; workers lost $1 billion in unpaid wages.
Demanding a “living wage,” Association of Mineworkers and Construction Union (AMCU) representatives sought to double pay to $1,200 a month, although negotiations ended with 20% annual raises. Company officials, however, said even those would be challenging given half their mines were insolvent even before Q1 2014.
Lonmin officials, for their part, called reorganization “inevitable” amid slowing demand for catalytic converters for cars and other vehicles, for which platinum is an essential component. Accordingly, renewed labor unrest is highly possible with AMCU officials, representing 80% of workers, who are sure to oppose further cutbacks.
Despite being sub-Saharan Africa’s biggest mining nation and a leading economy overall, job cuts in South Africa remain a thorny issue with its 25% unemployment rate. The strikes also slowed the manufacturing sector while contracting the economy 0.6% year-on-year, the first quarterly fall since 2009, reported The Wall Street Journal.