Health of economy depends on platinum strike resolution

Sometimes positive outcomes flow from the most inauspicious beginnings. The world's three biggest platinum producers and thousands of starving strikers will be hoping that this will apply to them.

What started out as a legal challenge by the Association of Mineworkers and Construction Union to the platinum producers' decision to bypass the union and contact the striking miners direct was shelved at the 11th yesterday. The opposing parties agreed instead to mediation to resolve the crippling four-month strike.

Much will rest on the three-day mediation, which starts today and will be facilitated by the Labour Court and overseen by Judge Hilary Rabkin-Naicker. Previous attempts to broker a deal, by both the CCMA and the Labour Ministry, came to nought.

The strike, the most expensive in South African history, has cost the companies R18-billion in revenue and the workers R8-billion in wages.

The stayaway, which has had a devastating effect on the platinum town of Rustenburg, will almost certainly slow the country's already pedestrian growth rate this year, severely denting state revenue collection.

If the strike continues for much longer and the platinum mines are forced to close shop, the government will find it that much more difficult to quickly ramp up its infrastructure-building programme, intended to stimulate the economy and create desperately needed jobs.

That said, the gulf between the opposing parties' positions is considerable. The companies have repeatedly said they cannot afford Amcu's demand of a R12500 entry-level wage, excluding allowances, by 2017.

This would amount to an increase of 30% a year and one of the platinum majors, Implats, has said it would be forced to close within 18 months if it gave in to the union's demands.

Amcu rejected the companies' latest offer of increases of up to 10% for the first year in a three-year deal that would include above-inflation increases.

The parties must find each other: failure to do so will incur a higher price than the country can pay.