JOHANNESBURG (Reuters) — The world's three biggest platinum firms signed a wage deal with South Africa's AMCU union on Tuesday but said that fallout from a five-month strike made job cuts and restructuring inevitable, setting the scene for more labour turmoil in the sector.
The three-year agreement with Anglo American Platinum , Impala Platinum and Lonmin ended South Africa's longest and costliest strike. The union's 70,000 striking members will return to work on Wednesday.
Association of Mineworkers and Construction Union (AMCU) president Joseph Mathunjwa told Reuters the companies had committed to "no retrenchments" for the duration of the deal, although his comment was at odds with statements from the firms.
Lonmin, the smallest of the three producers, said restructuring was "inevitable" to ensure its business remained afloat, especially while industrial demand for platinum in vehicle catalytic converters remained subdued.
Speaking to reporters and standing alongside his counterparts at Amplats and Implats after signing the deal, Lonmin CEO Ben Magara said the road ahead for the industry "remained a big challenge".
The companies have lost over 24 billion rand ($2.26 billion) in revenue as a result of the strike and production will only resume in September.
Job cuts are a thorny issue in South Africa, which has an unemployment rate of close to 25 percent and AMCU members have gone on wildcat strikes to protest at planned job losses at Amplats.
As it embarked on the strike in January under the populist battle cry of a "living wage", AMCU had initially demanded that basic wages of miners be more than doubled immediately to 12,500 rand a month.
In the end, its members settled for increases that amounted to around 20 percent annually.