BL Premium reports that Anglo American Platinum (Amplats) has drawn a clear line on wage hikes in advance of its response to its majority union’s demand for a 45% rise in basic salaries.  

While the platinum producer still has to formally table a counteroffer to the demands put forward by the Association of Mineworkers and Construction Union (Amcu), its CEO Chris Griffith warned that the company was unable to afford "unsustainable" wage increases.  His comments came as Amplats reported an R11/share, or R3bn, return to shareholders, the highest since 2008 and well above the dividend paid in 2018.  Amcu wants a R17,000 monthly basic salary for employees at Amplats, Sibanye-Stillwater and Impala Platinum, SA’s three biggest platinum miners.  This equated to a 45% increase, said Griffith, adding that Amplats was looking for a number closer to inflation, which is currently 4.5%, while mining input inflation is 7.5%.  The key factor behind Amplats’ post-tax profit more than trebling to R7.4bn in the six months to end-June was a 38% improvement in the price of the platinum group metals (PGMs) the company produced.  Griffith noted that two years ago two-thirds of the industry was unprofitable and needed this present windfall to invest in growth after a decade of stagnation.  “The industry is cash generative now, but wages make up more than 50% of costs for conventional PGM mines and less so for the mechanised mines, so the growth rate of wages is important for sustainability," commented Mandi Dungwa of Kagiso Asset Management.

• Read the full original of Allan Seccombe’s report on the above at BusinessLive (paywall access only)
• Read too, Amplats continues on the path to recovery, at Moneyweb

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