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Mining strike drags rand to 3-week low

Johannesburg - The rand fell to a three-week low against the dollar on Wednesday, dragged down by fears that a strike at platinum miner Lonmin [JSE:LON] could result in a repeat of the industrial unrest that hit South Africa's economy last year.

The rand weakened to R9.2540/$, its softest since April 23. It closed at R9.2350 in New York on Tuesday.

Workers at Lonmin's  Rustenburg and Marikana mines were on strike for the second day on Wednesday, halting production at all 13 shafts of the world's third-biggest platinum producer. 

South Africa's platinum belt, which saw violent strikes last year including the police killing of 34 miners on a single day in August, is a flashpoint of labour strife, with tensions running high over looming job cuts and wage talks. 

"This has reminded investors that the currency remains vulnerable to portfolio flows," said Christopher Shiells, emerging market analyst at Informa Global Markets. 

"We see dollar/rand perhaps testing the late April high above R9.3000."

South Africa is due to release retail sales data for March at 13:00. Economists polled by Reuters expect growth in sales to have slowed to 2.4% year-on-year, from a five-month high of 3.8% in February.

Analysts expect household consumption to moderate since South Africa's economic outlook remains poor and prospects for job creation remain bleak.

Yields on government bonds were up three basis points to 6.825% on the benchmark 2026 issue, equalling Tuesday's two-week high.
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Rand - Dollar
18.90
+0.2%
Rand - Pound
23.84
+0.3%
Rand - Euro
20.39
+0.2%
Rand - Aus dollar
12.31
+0.3%
Rand - Yen
0.12
+0.2%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
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