Mines grind to halt as strike starts

Johannesburg - Tens of thousands of South Africans joined a one-day national strike on Wednesday, hitting mining production as the biggest labour group flexed its muscles to remind the ruling ANC of its political clout.

Gold Fields [JSE:GFI], the world’s No 4 producer of gold, said its operations had ground to a halt with as many as 85% of workers downing tools in response to the call for a strike by Cosatu.

Harmony Gold Mining Company [JSE:HAR], another major producer, said all of its staff affiliated to the National Union of Mineworkers, South Africa’s biggest union, had stayed away. Neither company suffered any impact to their share price.

The immediate targets of the strike are new road tolls around Johannesburg, and short-term contract labour agencies that Cosatu says exploit workers.

“Despite the political and social gains scored since 1994, the working class in this country continues to reel under the pressure of neo-liberalism and the legacy of apartheid and colonialism,” Cosatu said.

However, despite its official billing, analysts said the strike was just as much about Cosatu sending a reminder of its clout to the ANC, which is due to elect a new leader at the end of the year.

As things stand now, President Jacob Zuma is the clear frontrunner to be re-elected ANC leader, and on track to win a second five-year term as president in a 2014 election.

However, Zuma cannot afford to ignore the unions - integral players in the struggle against apartheid which wield considerable grass-roots political power inside the ANC.

“Within the confines of ANC politics, there is clearly an attempt to spin the march as a challenge to Jacob Zuma’s leadership and a criticism of his commitment to workers and the poor,” Cape Town-based political economist Nic Borain said.

“This kind of jostling is commonplace in the politics of the ruling alliance,” he said. “This is the left-Cosatu faction reminding Zuma that its support is conditional.”

'Modern day slavery'

Several thousand red-shirted Cosatu supporters gathered in the centres of Johannesburg and Cape Town under the watchful eye of dozens of police in riot gear, backed by mounted officers, dog units and water cannon.

However, the atmosphere was good-natured, with marchers singing, chanting and waving placards saying Labour broking equals modern day slavery and Stop E-tolling, it’s highway robbery.

Business groups have criticised Cosatu’s action as political posturing that is going to pile more pressure on an economy forecast to grow at a relatively feeble 2.7% this year.

They have also disapproved of Cosatu’s targeting of contract labour agencies, saying they are essential for seasonal industries such as farming and without them, South Africa’s 24% unemployment rate might be even worse.

Any attempts to cut labour market red tape, in particular by making it easier to hire and fire workers, are met by fierce union opposition, but Finance Minister Pravin Gordhan tiptoed cautiously into the fray with a newspaper editorial advocating a shakeup.

“Given the scale of the unemployment challenge, no single policy offers the solution,” he wrote in Business Day.

“There is no panacea, no silver bullet. What is needed is a comprehensive set of reforms that maximise job creation.”