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UPDATE 2-S.African NUM union announces pay deal with top platinum firm Amplats

Ed Stoddard
Thursday, 12 Dec 2013 | 4:24 PM ET

Amplats@

* NUM agreement challenge to rival AMCU

* NUM has signaled it wants to retake platinum belt

* Deal reduces prospects for Amplats strike

JOHANNESBURG, Dec 12 (Reuters) - South Africa's National Union of Mineworkers (NUM) said on Thursday it had agreed a two-year wage deal for pay increases of 7.5 to 8.5 percent with Anglo American Platinum, the world's top producer of the precious metal.

NUM's rival the Association of Mineworkers and Construction Union (AMCU), which became the majority union at Amplats last year during a vicious turf war for members, remains deadlocked in wage talks with the company.

NUM spokesman Lesiba Seshoka told Reuters his union had been taking back members in recent months but could not provide an exact percentage for its representation at Amplats.

NUM has signalled it wants to retake South Africa's platinum belt, which sits on about 80 percent of the world's reserves of the metal, after AMCU wrested tens of thousands of members from it last year in a clash that killed dozens of people and unleashed a wave of wildcat strikes.

But NUM sources said they have been quiet about the in-roads the union has been making because of AMCU's reputation for intimidation and violence. The talks with Amplats had also been shrouded in secrecy.

AMCU has always denied it uses such tactics and members of both unions have been killed in gangland style slayings in recent months.

POLITICAL STAKES

The political stakes are also high as NUM is a key union ally of the ruling African National Congress, which faces general elections next year.

President Jacob Zuma and his government have been widely criticised for their handling of last year's mining crisis which saw police shoot dead 34 striking miners in a single incident near platinum producer Lonmin's Marikana mine.

Officials at Amplats, a unit of global mining group Anglo American, were not immediately available for comment.

NUM's agreement throws down a challenge to its enemy AMCU to deliver results. Seshoka said the increases, which are above the current inflation rate of 5.3 percent, applied only to NUM members.

Officials at AMCU, which has the green light from a government mediator to strike at Amplats if its members choose to down tools, also could not be reached.

Under the battle cry of a "living wage," AMCU has been pushing for a minimum monthly wage of 12,500 rand ($1,200) for entry-level workers from Amplats and rival Lonmin - more than double current levels.

It is also seeking big increases from Impala Platinum and talks between the company and AMCU were inconclusive on Thursday with the two sides agreeing to restart negotiations in the New Year.

AMCU also has regulatory clearance for legal strikes against Lonmin and Implats and if it launched stoppages against them and Amplats at the same time it could disrupt over half of global platinum output.

But a strike against Amplats now will likely be harder to pull off.

Companies say they cannot afford big pay hikes as they grapple with low prices and high costs which have made half of the industry's shafts unprofitable, according to analysts. Amplats fell into its first loss last year.

Platinum prices have been depressed by sluggish demand especially in Europe, a key market where the metal is widely used to make emissions capping converters for diesel engines. Its spot price is down around 16 percent in 2013.

Meanwhile, a wage strike at mid-tier producer Northam Platinum, organised by NUM, is almost six weeks old and shows no signs of ending.