THE latest incident that mine security guards opened fire at Anglo Platinum's [JSE:AMS]
(Amplats) Siphumelele shaft in Rustenberg, following a clash between rival union factions, is a reminder that the issues in the mining sector are only just beginning, says Peter Attard Montalto of Nomura.
Amplats was the focus of the first wave of cost cutting and they are also the focus of talk about mining rights removal powers by Mineral Resources Minister Susan Shabangu
Protest action has been rumbling on for some time and the mine there has never really recovered since being at the heart of the action in August-October last year, even though most workers did return to work.
This clash between unions is over who is "controlling" workers around the protests against the Amplats downscaling; even though information is extremely sketchy at this point, it seems depressingly familiar now that such action turned violent and threatened the company's site, which provoked the security guards.
Further deaths of union members is the last thing Amplats needs added to its plate. The matter is politically very difficult, given the ongoing commission into the Marikana deaths, and will not help Amplats in its dealings with an increasingly emboldened government on issues around mine rights, mine tax, etc.
Unfortunately the mine story is going to keep developing through this year as Amplats and others move forwards with downscaling and job losses and the government find itself in an increasingly difficult political bind on the issue.
For this reason, we remain very negative of the rand's prospects into the middle of the year as headlines build up.
*Peter Attard Montalto
is an emerging markets economist at
Nomura. Opinions expressed are his own.
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