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Labour unrest ups pressure on Zuma

Oct 03 2012 14:03 Reuters

Thousands of Lonmin miners in Marikana turned violent to ensure that operations at the company’s mine shafts had stopped during their six ensure week-long strike demanding better wages. Picture: Sebabatso Mosamo/City Press

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Lonmin plc [JSE:LON]

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Market cap 21.40bn

Last Updated: 16-09-2014 at 04:27. Prices are delayed by 15 minutes. Source: McGregor BFA

ANGLO AMERICAN PLC [JSE:AGL]

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Last Updated: 16-09-2014 at 04:28. Prices are delayed by 15 minutes. Source: McGregor BFA

KUMBA IRON ORE LIMITED [JSE:KIO]

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Change 2,01
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Market cap 94.87bn

Last Updated: 16-09-2014 at 04:27. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg - A spate of wildcat miners’ strikes spread to Africa’s top iron ore producer on Wednesday, escalating the labour unrest that has become a major headache for President Jacob Zuma.

The industrial action at Kumba Iron Ore [JSE:KIO], a unit of global miner Anglo American [JSE:AGL], further dented investor confidence in SA's economy as it showed the protests had moved beyond platinum and gold mines.

Zuma is under fire for failing to address and contain the workers’ protests, which stem in large part from glaring wealth inequalities.

As many as 75 000 miners, or 15% of the South African mining sector’s total workforce, are already out on strikes, while a national truckers’ stoppage is squeezing fuel suppliers.

Kumba, one of the world’s top 10 iron ore producers, said the wildcat strike at its giant Sishen Mine in the Northern Cape involved only 300 employees and was limited to one area in the open cast mine, leaving most of the facility unaffected.

“The action is being dealt with in line with the company’s labour relations procedure, with due consideration to the safety of the vast majority of workers who are not taking part in the unprotected strike,” Kumba said in a statement.

Kumba’s share price was over 4% lower on the news.

The recent weeks of labour strife, in which around 50 people have been killed, have stirred up criticism of the African National Congress and the presidency of Zuma, who faces a challenge from ANC rivals ahead of a party leadership conference in December.

The rand fell 1% in early trade on Wednesday, partly due to the escalation of the mines conflict.   

Fears of more mine clashes

Kumba was regarded as immune to the strike contagion because rank and file employees there in December who had worked for at least five years were given a lump sum of about R345 000 each after taxes as part of a share scheme.

This represented a fortune to workers earning as little as R7 000 a month. But it was not immediately clear if any of the 300 reported strikers were among the 6 200 who had benefited from the plan.

“We thought the share plan meant this would not happen there,” said Gideon du Plessis, the deputy secretary general of trade union Solidarity which represents skilled workers.

Solidarity is not taking part in the strike.

Kumba produced 41.3 million tonnes of ore in 2011.

Seven weeks of labour unrest and strikes, which originally erupted at the Rustenburg operations of platinum miner Lonmin [JSE:LON], have now spread across the mining industry.

The world’s No 1 platinum producer Anglo Platinum [JSE:AMS] (Amplats) is also grappling to resolve a strike at its Rustenburg operations. Worker attendance at Amplats’ Rustenburg mines has fallen to below 20%.

Some 21 000 Amplats workers have joined the illegal walkout.

Fifteen thousand miners at Gold Fields [JSE:GFI] KDC West mine downed tools on September 10, hitting production at the world’s fourth-biggest bullion producer. Gold Fields bosses have refused to negotiate with them.

The spreading labour unrest has raised fears the country could see a repeat of the stand-off with police at Lonmin’s platinum mine in August that led to the shooting of 34 miners.

It was South Africa’s bloodiest security incident since the end of apartheid in 1994, and an official commission of inquiry has started a probe this week into the killings.

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