Striking South African miners reject Lonmin pay offer

By Mish Molakeng

MARIKANA, South Africa (Reuters) - Wildcat strikers at Lonmin's Marikana mine rejected a pay offer on Friday, dimming prospects of ending five weeks of industrial action that has swept through South Africa's platinum sector and laid bare the power struggle in the ruling ANC.

Workers on a rocky outcrop at the mine where police shot dead 34 protesters last month dismissed the offer as way below the 12,500 rand ($1,500) a month sought by members of the militant Association of Mineworkers and Construction Union (AMCU).

"We are not interested," striker Molifi Phele said as hundreds of stick-waving demonstrators chanted and danced around him on the sun-bleached grass in the heart of the "platinum belt", 100 km (60 miles) northwest of Johannesburg.

"What he is offering cannot buy you anything. All we want is 12,500."

Lonmin said in a statement that talks had ended for the weekend and would resume on Monday at 0400 EDT.

The August 16 "Marikana Massacre" has poisoned industrial relations across the mines and has the potential to be "extremely damaging" to Africa's biggest economy, Finance Minister Pravin Gordhan said, in a shift of tone from last week.

The rand fell 3 percent on Wednesday as the unrest engulfed Anglo American Platinum, the world's biggest producer, and ripples have started to reach the bond market amid concerns Pretoria might resort to throwing money at the problem.

"Things could get really ugly," said Manik Narain, an emerging market strategist at UBS in London. "There is a risk the government will respond to the unrest with fiscal stimulus, which will not go down well with rating agencies."