Groups urged to get tough on illegal strikes

Business leaders warned this week that companies must take a hard line to stop more workers joining the nearly 140000 illegal strikers who have crippled the transport sector and halted gold and platinum output

On Thursday Anglo American Platinum (Amplats) started disciplinary proceedings against about 23000 employees at its Rustenburg operations who have been on a wildcat strike since September 12. Gold Fields said it would sit out the illegal strike that has cost it a ton of gold, or nearly R500-million.

"We have to take a stance. We can't have people not coming back to work. We can't have this anarchy that we see reigning," said Chris Griffith, Amplats CEO.

"The more companies stand up for the rule of law, the better it will be for our country and the better it will be for future wage negotiations. The companies taking a stance should be supported. I think the more companies that take a stance against this, the quicker we'll get back to normality."

Gold Fields said it would not negotiate with illegal strikers and dismissals were a real option.

"We've been in talks with state departments and the police for support if need be," investor relations head Willie Jacobz said.

CEO Nick Holland told Moneyweb the group could afford to sit out a strike.

Strikes typically do not exceed six to eight weeks as workers get exhausted and the financial pressure builds, said Albert Wocke, professor at the Gordon Institute of Business Science.

Griffith said companies set a dangerous precedent when they reward "anarchy" by offering illegally striking workers pay rises to get them back to work.

"Then it won't only be in the mining industry, it won't only be in transport. Soon it will be in every industry. Clearly we cannot as a society think that's a good idea," he said.

Impala Platinum, which lost R2.8-billion in revenue in an illegal and violent six-week strike in the first quarter, offered its workers another rise this week to avert a strike. That would add 4.8% to the wage bill, it said.

Lonmin is still in talks with its banks to avert the recall of a $950-million loan facility and has yet to restart production. It is giving its workers a 22% rise to end a strike that cost the lives of 45 people and 4200 existing and planned jobs.

Samancor Chrome offered its workers an increase on Friday to end an underground sit-in strike.

AngloGold Ashanti is losing about 32000 ounces of gold a week, but spokesman Alan Fine said it has no plans at present to issue ultimatums to get most of its 35000 striking workers back to work. By close of business on Friday, 60000 truck drivers were on a violent illegal strike involving property destruction.

"The ripple effect of these strikes will be a tsunami," said David Davies, SGB Securities analyst. "The fallout of these strikes will have a significant long-term effect on companies, individual employees and their dependants, associated industries, taxes and economic growth."

The wildcat strikes would have an especially detrimental effect on SA's maturing gold and some platinum mines already facing significant cost pressures. Many of them needed to downsize within 12-36 months, even before the strikes.

"Mining companies have been trying to keep retrenchments at bay, but strikes and consequent production and revenue losses might force them to rethink the matter," Davies said.

Griffith, Amplats CEO since September 1, said: "There will be job losses as a result of this."

Amplats is already reviewing its Rustenburg operations and is widely expected to sell assets and close shafts. "The point I have made to our employees every single day since I started this job is: there's a number of assets in Rustenburg that are not making money. In some form or another, action will have to be taken around those assets. This kind of industrial action does not help that position," Griffith said.