SA's mining unrest spreads

Rustenburg - Labour unrest in South Africa’s platinum belt spread on Wednesday, raising concerns that anger over low wages and poor living conditions could generate fresh violence after 34 striking miners were shot dead by police last week.

The strike that started last week at Lonmin’s Marikana mine has pushed up platinum prices and stoked worries about investing in Africa’s biggest economy, where chronic unemployment and massive income disparity threaten social stability.

The world’s top platinum producer, Anglo Platinum [JSE:AMS], said on Wednesday it had received a demand for a pay increase from its South African workers, while a trade union said miners at Royal Bafokeng Platinum’s Rasimone site were blocked from reporting to work by colleagues.

The price of platinum leapt to its highest since early May on Wednesday, driven by concern about supply from South Africa, which holds 80% of the known reserves of the metal, which is used in jewellery and for catalytic converters in cars.  

Spot platinum rose by as much as 1.5% to touch $1 524.49 an ounce, trading at $1 521.75 by 08:41 GMT.

The labour troubles were touched off by a violent turf war between labour unions at the Marikana mine.

Ten people had been killed last week before police opened fire on striking miners on Thursday, shooting dead another 34 in the worst such bloodshed since the end of apartheid white rule in 1994. President Jacob Zuma has ordered an inquiry.

“Over the past couple of years, South Africa has witnessed a number of extremely violent strikes and protests partly due to worsening poverty, increasing social inequality, low wages, and poor social service delivery,” US-based Human Rights Watch said in a statement on Wednesday.

It urged the government inquiry to address the underlying social and economic issues fuelling the unrest.

Workers have trickled back to Lonmin’s Marikana mine this week, but most have stayed away for fear of being caught in the conflict between the long-established National Union of Mineworkers (Num) and the militant breakaway Association of Mineworkers and Construction Union (Amcu).

Zuma, who has appointed a panel to investigate the violence, has tried to reassure investors their money is safe while appealing to all sides to end the violence.

Zuma’s political foes have been piling pressure on the president. They accuse him and the ANC, which has placed several former Num members in senior government positions, of adopting poor policing policies and of not caring enough about workers labouring deep underground.