Lonmin's South African Miners Get 22% Wage Increase, End Strike

Tyler Durden's picture

It appears that the strike that had crippled South Africa's precious metals industry is coming to an end. Reuters reports that striking miners at Lonmin's Marikana mine in South Africa said on Tuesday they accepted a management pay rise offer and would return to work on Thursday after six weeks of mining sector unrest that shook Africa's largest economy. The cost to get back to work? A 22% hike in wages, and a corresponding crunch in corporate margins (which we hope finally clears up to all those who have been so confused for years why a surge in the underlying PMs usually tends to backfire on the miners extracting it, as labor costs surge as much if not more). "The gathered strikers cheered near the mine, 100 km (60 miles) northwest of Johannesburg, when they were informed of the 22 percent wage increase offer, a Reuters witness said." Lonmin is not alone: "In another sign that weeks of labour unrest in South Africa's platinum belt could be ending, world No. 1 platinum producer Anglo American Platinum said it had resumed its operations in the strike-hit Rustenburg area. On the news of the Marikana agreement, the spot platinum price fell 2 percent to a session low at $1,627.49/oz and the rand firmed against the dollar."

More:

The six-week conflict in the mining sector, which claimed 45 lives, had also ignited criticism against President Jacob Zuma and his ruling African National Congress. They face accusations from political rivals that they have neglected poor workers and sided with wealthy business owners.

 

"Anglo American Platinum Limited (Amplats) confirms that all of its Rustenburg operations have resumed, effective from today's morning shift," the company said in a statement.

Congratulations to South African miners for finally turning the tide against the global corporation. The question now is: how many laborers, miners and otherwise who have all the leverage in a world in which corporations have gradually fired virtually everyone but the absolutely muscle that drives corporate top and bottom-lines, will follow suit, and demand equitable treatment in a world in which the central bankers are hell bent on sending inflation off the charts.

And what happens to aggregate prices if wages around the world suddenly receive a comparable 22% upward step-function? We will let you know as we find out.

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malikai's picture

Platinum dropped hard bringing gold and silver with it eventually.

NotApplicable's picture

I can haz wage inflation?

(only two weeks away from my .9% "raise")

boogerbently's picture

.....so, what does that put them up to, about 28 cents a day ?

boogerbently's picture

We need to show the 47%'rs here what people will do for so little money. (In the REAL world)

jballz's picture

 

we need to take away the police force and legislative/judicial system that protects the corporations and see how the 47% restrains themselves from eating their owners out of sheer moral fortitude alone.

 

Oh......wait, well THAT government control is okaaaaaay.

 

fucking idiots.

jballz's picture

can't swear to the source (think Al Jazeera) but they were pushing for a 100% increase from 750 Rand a month to $1,500.

 

750 Rand is $91, so.....this puts them over 100. Better than $3 a day. I'll bet Gina Rinehart is pissed. She'll never get Aussies down to $2 now.

Mr Lennon Hendrix's picture

That wage increase will not be seen at the margin.  Producers will raise their selling price. 

Platinum is such a small market and these mines have large pricing power.

Divided States of America's picture

One day if the Wall Street bankers ever go on strike, the markets will rally.....and when they get their 50% increase in salary and another 200% jump in bonus, the markets will rally even harder. This is the fucked up world we live in.

Thanks fucktard Bernank.

Ratscam's picture

Platinum fell back to a 15 year USD 130 discount to gold. Was 100 USD this morning.

Time to grab some PLT or Palladium calls.

malikai's picture

http://blog.quantsig.net/2012/09/18/gold-silver-platinum/

Might be a good pair trade or two in there if the premiums are nice. I don't know..

Newsboy's picture

Ahh, collective bargaining!

CPL's picture

With the rest of the market as well it looks like.

Mr Lennon Hendrix's picture

This is why forming a union works.  Like minds and like situations need to form tribes so to rally for equal rights.

This however only works if you provide an important service [cough] unlike Chi-town's public school system [cough].

MachoMan's picture

It works long enough until the employer lets the employees blow themselves up...  or, what usually occurs sooner, take on too much debt.

darteaus's picture

Will they be getting paid in dollars?

fonzannoon's picture

45 people died for a 22% pay increase. How much were these guys making? If you were making 40k a year would you risk your life to make 48k? This is very easy for me to say but once they started shooting, these guys should have went all or nothing.

centerline's picture

Time for a 22% reduction in workers with a 22% unpaid increase in work hours for the rest of them.

Divided States of America's picture

Yup, those 45 lives were given up for the benefit of the many others. I dont know why it is the opposite in America, where the many (middle class) are hosed for the sake of the select few (the 1%)

MachoMan's picture

actually, they weren't given up...  I think the more realistic way of framing it would be to say that 45 guys got shot during the protest...  I'm willing to bet if you managed to stick their ghosts with some truth serum, they'd tell you they weren't planning on getting shot and would rather have the pay raise and their lives back.

Dr. Engali's picture

The way the central banks are inflating the currency that 22% won't mean squat soon. They will be on strike again in the very near future. I'd be willing to bet a ham sandwich on it.

MachoMan's picture

Fuck the necessity of more printing, it doesn't mean anything NOW...  capital = infinity; labor = 0

The only hope we can have is that the capture has not been so deep this time as to ensure feudalism in practical perpetuity.

MeBizarro's picture

They aren't making anywhere near 48k a year so your comment is not remotely applicable.  Go back and read labor history from 1865 to say 1941 or Western European labor history from say early 1800s until 1914.  You will see improvements in working conditions and pay were very gradual & incremental. 

MBB's picture

With  24.5% official unemployment and an unofficial 35% unemployment rate. How many lay offs will be enforced to increase the unemployment rate to ensure the profitability of the mine.

MeBizarro's picture

So they should work for substitence wages then?  The problems with South Africa's employment rates have to do with several issues that have nothing to do with the mine strike and largely are vestiges of the apartheid era including geographical isolation of black townships, incredibly poor education system, etc.

ParkAveFlasher's picture

Palladium 1, Platinum nil.

Gringo Viejo's picture

Would like to offer all Chicago teachers a one way ticket to South Africa. Your brothers & sisters await you! Power To The Pimple!

grimey's picture

Given that a 300% raise would've cost $36m, compared to $210m fcf in 2011. I don't think a 22% raise will have particularly frightening implications for the global investor class. The miners are still tragically underpaid and living in sewage, but when the other side owns the police and is t afraid to use them it's hard to reach equitable terms

FranSix's picture

The London Gold Pool remains intact.  What disturbs me is that after so many deaths miners are so willing to take any deal at the drop of a hat and go back to work.

Zero Govt's picture

so Lonmin found a negotiating point (up the wages) a better solution than using taxpayer funded cops with guns to their industrial dispute

why ever did they not try that from the start?

Darth Hayek's picture

Too bad their brothers in the diamond mining industry are about to get reamed big time...

WhiteNight123129's picture

Platinum bulls on the run, Lonmin shoudl agree to have their workers stage a riot from time to time so the company can sell its production with futures contracts at nice prices.

 

SmittyinLA's picture

The mine owners are the government leaders, most of the miners are imported scab laborers brought in "to do the work that South Africans don't want to do...for $2 an hour" , like in America locals are too lazy and expensive to work the world's richest platinum lode.