Tensions simmer in SA’s mining sector

Windhoek – Tensions continue to simmer in South Africa’s mining sector heightened by mineworkers unions’ rivalry, as they battle for membership and recognition, and demands for pay hikes by as much as 60 percent.
Mineworkers in South Africa’s gold and coal sectors this past week laid out demands for wage increases of between 10 percent and 61 percent for entry-level miners.
Wage negotiations are just about to start this month and the escalating tension has found an early victim in the South African currency, which last week breached the psychological key 10.0 level against the United States dollar.
The regional economic powerhouse has been skating on thin ice for the past three years, with tepid growth, falling investor confidence dramatised by unions militancy and the massacre of 34 miners at Lonmin’s Marikana mine last year.
A raging turf war between South Africa’s oldest union, National Union of Mineworkers (NUM) ‑ a key ally of the ruling ANC ‑ and Association of Mineworkers and Construction Union (AMCU) is blamed for some of the tension gripping South Africa’s platinum mining belt.
AMCU has usurped NUM’s dominance at Anglo American Platinum (41 percent), Impala Platinum (more than 50 percent) and Lonmin (70 percent).
This week, a NUM shop steward was shot dead and another reportedly critically wounded at Lonmin’s Western Platinum in Marikana.
More than 50 people have been killed in mine labour related violence during this past year, reports say.
The wild-cat strikes in South Africa’s mining sector have not been limited to platinum mines alone.
This week Glencore Xstrata said it had fired 1 000 striking workers at three of its chrome mines, who have been on strike since May 28.
The strike reportedly started at Helena Mine in North West province and later spread to Magareng and Thorncliffe mines.
All the mines are situated along the platinum and chrome-rich Bushveld complex.
The spectre of strikes is not over, as wage talks over new two-year contracts begin this June.
The NUM is demanding wage increases of up to 60 percent for entry-level workers.
“When our mining sector is in difficulty, it affects our economy widely, leading to industrial slowdown,” President Jacob Zuma said recently.
“If the disruption is sustained, there is no doubt about it, it will impact on growth.
“If we are able to avert it, and I think we will, then we stand a good chance that if it impacts on growth at all, the impact will be negligible,” Lungisa Fuzile, director general of South Africa’s National Treasury told the media.
Rolling strikes in the mining sector are being blamed for about R10 billion in lost outputs.
Strikes are also reported to have shaved 0.5 percent off the gross domestic product (GDP).
Latest statistics show that South Africa’s growth in 2013 first quarter slowed down to 0.9 percent from 2.1 percent in fourth quarter 2012.
On Tuesday, South Africa’s Chamber of Commerce and Industry (SACCI) said headline business confidence index fell to 90.4 in May from 92.3 in April.
SACCI blamed the fall in business confidence levels to on-going labour unrest, which it says is having an adverse impact on business mood as well as commercial and industrial activity levels.
“Although just a small drop, the result is nevertheless meaningful. Not only is the index now back in net negative terrain-where pessimism exceeds optimism-but the decline in sentiment was also widespread,” Ettienne Le Roux, chief economist at RMB said.
“Indeed, the performance of the economy can be described as one of weakness, mixed together with some pockets of resilience.
For South Africa to break loose from this low and unsatisfactory growth path, the global economy needs to recover more forcefully and the local constraints holding the economy back must be tackled with great vigour,” he added.

June 2013
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