The shares in Impala Platinum (Implats) rose after it landed a “historic” five-year wage deal with the Association of Mineworkers and Construction Union (Amcu), which secures stability at its Rustenburg and Marula Platinum operations.
The shares of the producer of platinum group metals increased 2.9 percent to R183.61 in midday trade yesterday, having risen 155.81 percent over the past three years.
The settlement was effective from July 1, and marked the first time Implats has secured and signed a wage agreement before it expires. Amcu is the majority union at Impala Rustenburg and Marula, and Implats’s recognition agreement with Amcu dates back to when it was signed in July, 2013.
The mining firm said the deal assured employees of increases to all major components of remuneration over the next five years including basic salaries, living-out and home-ownership allowances, medical aid and pension fund contributions. It was also in line with the current mining inflation of 6.5 percent and considered the sustained inflationary pressures faced by employees.
Implats chief executive Nico Muller, said: “We are enormously pleased with the outcome and the successful conclusion of this process.”
Muller said the Implats wage task team and the Amcu leadership structures must be commended for a maturing relationship, one which Implats would continue to build to the benefit of its employees and the sustainability of our operations.”
Amcu president Joseph Mathunjwa said: “This landmark agreement is fair and sustainable. It secures a meaningful five-year period of stability for the workforce and advancing job security, while also considering the pressures our members face in their daily lives and the vital role they play in supporting their dependants and contributing to the growth of the South African economy.
“These five years will give us time to devote the necessary attention to the upliftment of the communities and addressing their socio-economic needs. We will also be able to have a renewed focus on health and safety issues, while preparing ourselves for the Fourth Industrial Revolution by upskilling workers, and focusing on industrialisation and beneficiation,” he said.
This agreement also secured five years of stability at Implats’s operating entities, and allows Implats to focus on safe and sustainable production.
Seleho Tsatsi, an investment analyst at Anchor Capital, said, “Implats is the second major PGM miner to announce a wage deal after Amplats earlier this year. There was moderate strike action at Implats' Rustenburg operation recently. Market expectations have been for an Implats wage deal to be agreed.”
He said attention would now turn to Sibanye-Stillwater, which was still to agree a wage deal for its South African PGM operations in the second half of this year.
“The industry is currently facing pricing pressure, particularly for rhodium and palladium, which have come off their recent all-time highs. Lower prices and mining cost inflation is likely to lower margins from their record 2021 levels,” he said.
The wage deal also comes as Implats tries to bed down a proposed acquisition of Royal Bafokeng Platinum (RBPlat), which is currently before the Competition authorities.
Implats said the deal, if it went ahead would provide compelling benefits for South Africa, including sustainable employment in North West province, and meaningful extensions to the expected life-of-mine of the two operations to secure enduring benefits for all stakeholders.
Mathunjwa said: “Implats’s efforts to acquire their neighbour, RBPlat, will further strengthen job security in the region and sustain the socio-economic development of our country, and must be applauded and supported vigorously.”
In April, Implats in its third quarter production report for January to March 31, 2022 said its concentrate production declined by 2 percent to 768 000 ounces of platinum group metals amid several headwinds.
However, it was on track to meet its 2022 guidance.
BUSINESS REPORT