Loading...
See More

Mine unrest ends, job losses loom

Nov 15 2012 21:39

Company Data

Anglo American Plat Ltd [JSE:AMS]

Last traded 370.20
Change -4.1
% Change -0.01
Cumulative volume 26091
Market cap 99.84bn

Last Updated: 22/10/2014 at 11:19. Prices are delayed by 15 minutes. Source: McGregor BFA

Related Articles

Miners accept Amplats offer - NUM

New offer for Amplats strikers

Tough times ahead for new Anglo CEO

Sacked miners get time to reclaim jobs

Police disperse North West miners

Relief as last of SA mine strikes ends

 

Johannesburg - Thousands of miners returned to work on Thursday at Anglo Platinum [JSE:AMS], putting a lid on the most devastating and costly bout of labour unrest in South Africa in nearly a century.

The strikes started three months ago at the London-listed Lonmin mine in the Northwest platinum belt, before spreading to other mines and other sectors.

Unions estimate that in total over 140 000 workers downed tools across the country, most of them in the gold and platinum trade.

Deadly violence ensued, leaving more than 50 dead.

Estimates put the cost of the strikes at $1.2bn, roughly 1% of quarterly gross domestic product (GDP).

Over the months firms rolled out incentives and threats and more incentives. One mine by one, miners returned to work.

Amplats' more than 12 000 workers were the last major group of miners who refused to go to the underground, until the company enticed them with new monthly allowance and a one-off bonus this week.

But as the dust settles, mining firms are counting their losses.

Workers now face the prospect of job losses and the outlook on Africa's economic powerhouse is dim.

"This is the messiest, most violent, destructive and costly strike in the mining sector in maybe 90 years," Peter Major, mining analyst at Cadiz Corporate Solutions, said.

Miners are likely to hold on to their jobs for now, but some are likely to be laid off once companies work out their long-term plans, having factored in the impact of the strike.

At this state "nobody knows what it's going to cost in terms of time or money", said Major.

"Even the mining managers don't know how much they are going to rationalise. They probably need three or four months before they make an educated guess."

What is certain is that, in a country where one in every four people is unemployed, the ranks of the jobless will swell.

The scale for cuts is vast. The mining sector currently employs 500 000 people, and almost double that number if ancillary industries are included, making it one of the largest employers in South Africa.

"Without doubt there are going to be less people working on the mines in South Africa," Major said.

Trade union Solidarity says it is already in retrenchment negotiations at five mining companies.

Some layoffs had been on the books before the work stoppages of the past three months.

Mine operators were already buckling under low mineral prices and high production costs.

"Although not all strikes necessarily result in retrenchments, they definitely cause uncertainty in the industry," said Solidarity's spokesperson Johan Kruger.

At least 14 mining companies have been touched by strikes this year alone, according to Solidarity.

Investors have been spooked and the urge to spend may remain low for some time to come.

A new bout of strikes, this time in the farming sector, complicates any plans by President Jacob Zuma's administration to improve the country's image in the eyes of foreign investors.

The country is "probably going to be on an all-time low" in terms of foreign direct investment inflows, said Major.

The mines crisis has slowed South Africa's growth to 2.5% this year.

NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com 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
38 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

Retailers of any shape and size can now unlock the power of mobile transacting.
 

Money Clinic

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