In partnership with

Amplats fires 12 000 as strikes escalate

Oct 05 2012 16:17
Johannesburg - The world’s largest platinum producer, Anglo Platinum [JSE:AMS] (Amplats), fired 12 000 workers taking part in a three-week illegal strike on Friday, following through on tough talk over wildcat stoppages at mines countrywide.

Two months of labour unrest has spread from mines to other parts of the economy, causing political problems for President Jacob Zuma and his ruling African National Congress (ANC).

Shell said on Friday it could not honour fuel delivery contracts around Johannesburg because of a two-week truckers’ strike.

Police shot dead another striking miner overnight, taking the death toll to 48 in the worst labour unrest since the end of apartheid. 

The rand fell 2% to within sight of a three-year low against the dollar amid fears the (ANC) is powerless to manage the spreading labour unrest.

Zuma has been criticised for his low-key response, especially after police killed 34 strikers at Lonmin’s Marikana platinum mine on August 16.

In a speech to business leaders late on Thursday he put a positive spin on the situation, stressing that since the end of white-minority rule South Africans have shown “the capacity to overcome difficulties when we work together”.

“We should not seek to portray ourselves as a nation that is perpetually fighting,” he said.

However, with an ANC leadership run-off looming in December, Nelson Mandela’s 100-year-old liberation movement is preoccupied with its own divisions and Zuma is unlikely to take any action to stabilise the economy that could upset his political allies in the unions.

“In the build-up to the election, the government is unlikely to come out with any clear policy directives,” said Simon Freemantle, an analyst at Standard Bank in Johannesburg. 

Reflecting such concerns, Moody’s cut South Africa’s credit rating last week, and the intensifying strikes in the mining sector and elsewhere are raising very real fears of a big hit to already sluggish economic growth for this year.

Finance Minister Pravi Gordhan has already said he will have to cut his 2.7% growth forecast for 2012 when he delivers an interim budget on October 24.

Miner shot

More than 75 000 miners, or 15% of the workforce in a sector that accounts for 6% of output, have been out on unofficial strikes and tensions with security forces and mining bosses are running high.

Near the “platinum belt” city of Rustenburg, 120km northwest of Johannesburg, workers said a miner was killed by a rubber bullet fired by police overnight.

“He was shot here by the police,” Mbubhu Lolo, a striker from Amplats told Reuters, pointing to his midriff.

Police would not confirm the cause of the death, although the ground nearby was strewn with spent rubber-bullet shell casings and teargas canisters after clashes involving water cannon the previous evening.

On Friday, protesters in a shanty town near the Amplats mine barricaded streets with rocks and burning tyres, watched by a contingent of more than 30 riot police backed by armoured vehicles.

Earlier in the week, strikers torched an Amplats training centre and two conveyor belts, making it harder to restart operations when it does manage to resolve the standoff.

AngloGold Ashanti, South Africa’s biggest bullion producer, has lost virtually all local production due to wildcat strikes, while rivals Gold Fields and Harmony Gold  have also taken a hit.

Around 300 strikers at Kumba Iron Ore have also blockaded the company’s giant Sishen iron ore mine in the remote Northern Cape province.

Force majeure

The mining sector unrest has shaken investor confidence, and signs of it spreading into manufacturing - which accounts for 15% of output - and an expanding truckers’ strike have caused even more alarm.

“There is fuel available across the country, so the issue is not fuel supply, but the challenge is delivering it safely to our retail sites,” oil giant Shell said after invoking a “force majeure” clause that allows it to break contracts due to situations beyond its control.

Other petrol companies are holding their breath, especially around the commercial hub of Johannesburg, but have not yet followed Shell’s move.

Raising the stakes in its two-week stoppage by 20 000 truckers, the Satawu transport union said it wanted co-workers on South Africa’s railways and ports to strike next week, a development that would affect coal and other mineral shipments.

Coal output from one of the world’s biggest suppliers has so far been unaffected but any disruption could hit power utility Eskom, which is already struggling to prevent a repeat of a 2008 power crisis when the grid nearly collapsed. Some 85% of South Africa’s electricity is generated by coal-fired plants.

Many supermarkets and logistics firms are running on back-up plans because of the truckers’ strike. US car giant General Motors said production at its Port Elizabeth plant on the south coast has been affected.

Toyota suffered a four-day wildcat outage at its Durban plant, although workers returned on Friday after securing a 5.4% pay rise.

“As far as I know, the guys have been pitching up for work and production has restarted,” Toyota SA spokesperson Leo Kok said.




Read Fin24’s Comments Policy publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

The SARB’s Monetary Policy Committee will decide on the next move in interest rates tomorrow will they?

Previous results · Suggest a vote