South Africa minister warns on economy as mines face strike threat

Mon Jan 20, 2014 8:40am EST
 
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By David Dolan

JOHANNESBURG (Reuters) - South Africa's ailing economy cannot afford more mine labor unrest, Finance Minister Pravin Gordhan said on Monday, as the platinum industry's main trade union served notice on the world's top three producers that it planned to strike this week.

A series of sometimes violent strikes in the factory and mining sectors constrained growth to a sluggish 2 percent in 2013, hampering efforts by President Jacob Zuma's government to create badly needed jobs as it braces for elections this year.

The African National Congress has swept elections since overturning white minority rule in 1994, but the party Zuma now heads faces growing criticism that it has failed to lift millions of blacks out of poverty during 20 years in power.

Platinum producers Anglo American Platinum (AMSJ.J: Quote), Lonmin (LMI.L: Quote) (LONJ.J: Quote) and Impala Platinum (IMPJ.J: Quote) said they had received notice from the Association of Mineworkers and Construction Union (AMCU) to strike in 48 hours, setting the stage for another crippling wave of unrest.

The chamber of mines, which represents bullion producers, said it was seeking a court order to block plans by the AMCU to down tools at Sibanye Gold's (SGLJ.J: Quote) Driefontein mine, Harmony Gold's (HARJ.J: Quote) Kusaselethu and Masimong mines, and at AngloGold Ashanti's (AGLJ.J: Quote) local operations.

The AMCU, which has a record of militancy, has rejected a 8 percent pay hike that rival union National Union of Mineworkers (NUM), which still represents most gold miners, agreed with producers last year.

The rand hovered close to recent five year lows after news of the planned strikes and Gordhan's warning, with scope to extend its nearly 4 percent losses against the dollar in the first three weeks of the new year.

Renewed labor strife in Africa's biggest economy will raise a red flag for ratings agencies after more than 50 people died during violent mine protests in 2012 that triggered downgrades from Moody's, Fitch, and Standard and Poor's and helped knock about 25 percent off the rand's value.   Continued...

 
Striking miners gather for a meeting outside the Impala Platinum mine in Rustenburg, 120 km (74.6 miles) northwest of Johannesburg February 21, 2012. REUTERS/Sipiwe Sibeko