The world’s #1 producing nations for platinum and copper are facing a common problem this week. And latest developments suggest this issue could be a potentially explosive one.
The challenge is labor negotiations in the mining sector. With both the world’s top platinum miner South Africa, and top copper producer Chile facing tough talks with strong local unions.
South Africa’s powerful platinum mining group Association of Mineworkers and Construction Union (AMCU) said last week it is beginning internal meetings as of last Thursday. To decide on pay demands the union will put to platinum mining companies during upcoming wage talks. Related: Key Pipeline Could Unleash Alberta’s Oil Sands
The AMCU demands will be critical for South Africa’s platinum sector. With the union being the largest in the industry — serving major miners including Anglo American Platinum, Lonmin, and Impala.
The union is meeting now because its current two-year pay agreement with those companies expires at the end of June. Which means the next several weeks are likely to see some intense negotiations — especially given that the last round of wage talks in 2014 ended in a 5-month strike that crippled South Africa’s platinum sector.
At the same time, Chile’s copper sector is facing a similar issue. With the country’s national mining body Sociedad Nacional de Minería (Sonami) noting that over half of the country’s largest miners are facing labor negotiations soon. Related: Is OPEC A U.S. National Security Threat?
Sonami’s president Alberto Salas said at a recent industry event that over 50 percent of Chile’s largest miners are due for wage talks over the next 12 months.
That includes the world’s largest copper miner, Codelco — which faces negotiations with 9 different unions across its various operations. Anglo American also has talks upcoming with 4 unions, while miners like Antofagasta, Kinross, BHP Billiton and Glencore all have separate labor negotiations scheduled.
Most of these companies have indicated that wage offers are likely to be restrained — given the current lower copper price. Watch for the reaction of the unions to these offers, and for any signs of brewing unrest that could impact production in both of these critical countries.
Here’s to talking it out,
ADVERTISEMENT
By Dave Forest
More Top Reads From Oilprice.com:
- Saudi Market Share Takes A Hit As Russia Doubles Oil Exports To China
- The Wildest Predictions For Oil Prices In 2016
- Why The Arctic Oil Dream Is Not Over Yet
