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4 E&MJ; • JULY 2014 www.e-mj.com NEWS-LEADING DEVELOPMENTS South Africa's major platinum producers— Anglo American Platinum, Impala Plati- num and Lonmin—and the Association of Mineworkers and Construction Union (AMCU) signed wage agreements on June 24, ending a strike by an estimated 70,000 AMCU members that began on January 23. Workers began returning to the mines on June 25; however, resump- tion of full operations could take up to three months, or perhaps longer. The companies signed separate three- year agreements with the union, which differed marginally as a result of each company's particular circumstances. The agreements were effective from July 1, 2013, for Anglo American Platinum and Impala and from October 1, 2013, for Lonmin and will run until June 30, 2016. Mine employees whose basic wage is less than R12,500 a month will receive annual increases of R1,000/month for the first two years of the agreements. At Lonmin, the same increase will apply in the third year, while at Anglo American Platinum and Impala, the increase in the third year will be R950/month. (The Rand:U.S. Dollar exchange rate at the time of the settlement was about R10.6:$1.) Employees currently earning R12,500/ month or more, or whose basic rate reach- es that amount during the course of the agreement, will receive an 8% increase for the first year of the agreement and 7.5% thereafter. The settlement also included agree- ments regarding back pay, fringe bene- fits, and living-out allowances. In a joint statement, CEOs Chris Griffith of Anglo Platinum, Terence Goodlace of Impala, and Ben Magara of Lonmin said, "The road ahead remains a challenging one, and it will take some time for our operations to resume full production, with the safety and wellness of employees being paramount. This is at a time when the platinum market remains subdued, and operational prof- itability remains constrained." Issues that will require the compa- nies' attention include: assessing and improving the health and wellness of employees and undertaking necessary operational and safety training; restoring the physical environment in the affected mining areas and processing plants and remedying any conditions that may have deteriorated during the lengthy period that they were not in operation; rebuild- ing relationships and trust between employees and management; assisting employees in stabilizing their wellness and financial well-being, and addressing in particular the high levels of indebted- ness that may have accrued during the period of the strike; and restocking the metals pipelines. While the CEOs' response to the set- tlement was subdued, AMCU president Joseph Mathunjwa and AMCU members were for the most part jubilant, regarding the settlement as a clear win. The union did not achieve its initial inflexible demand of a R12,500/month base wage for all employees; however, by the end of the three-year agreements, a significant number of union members will be earning R12,500/month, and the entry level base wage will be no less than R8,000/month. PwC Assesses Tough Times in the Mining Industry PwC's annual review of the aggregated financial results of the world's 40 largest mining companies as measured by market capitalization suggests that in 2013 the global mining industry endured one of the most difficult operating environments in recent memory. The review, titled Mine 2014: Realigning Expectations and released on June 5, noted that a crisis of confidence prevailed within the industry throughout the year, and no company seemed to be immune. Evidence of tough times can be seen in the number of mining companies that changed CEOs over the past two years. In 2012, a quarter of the top 40 companies saw a new CEO take the helm, while in 2013, another seven companies (18%) changed leaders. "This means almost half of the companies that have been in the top 40 over the past two years have hired a new CEO since 2011—an incred- ible statistic," PwC stated. The report noted that, "Traditional quick-fixes to falling commodity prices were widely adopted: park your fleet, reduce head count, slash costs, defer capital expenditure. However, we are also starting to see some more fundamental shifts in strategy emerge, namely: Joseph Mathunjwa and Jeff Mphahlele of the Association of Mineworkers and Construction Union sign the strike- ending miner wage agreement with Terence Goodlace, Nelson Ndlala and Mathias Sithole of Implats. Five-month South Africa Platinum Strike Ends EMJ_pg04-27_EMJ_pg04-27 7/2/14 1:50 PM Page 4