/ 30 May 2013

Rand takes a dive after Zuma pep talk

Rand Takes A Dive After Zuma Pep Talk

Despite this, the rand dropped to its lowest level in four years. The local currency weakened to below R10 against the US dollar, levels it last reached in March 2009.

In a special press conference, Zuma told journalists he had appointed his deputy, Kgalema Motlanthe, to lead a team of ministers to intervene in the troubled mining sector, one of the country's six job drivers. Motlanthe will be assisted by: Finance Minister Pravin Gordhan, to reassure investors; Labour Minister Mildred Oliphant, to support mining companies and unions in ensuring fair labour-relations processes; and Mineral Resources Minister Susan Shabangu, to promote certainty and stability through mining policy. 

Zuma said "fruitful” interactions had taken place in the past week. 

Tensions are high at the Lonmin platinum mine in Rustenburg in the North West, where the Association of Mineworkers and Construction Union (Amcu) has been demanding that the National Union of Mineworkers (the NUM) vacate the Marikana mine offices because it has lost the organisational rights threshold of 30% membership at the mine.

The NUM is affiliated to Cosatu, an alliance partner of the ruling ANC, a matter that has raised questions about government's objectivity.

Zuma said South Africa needed a stable and growing mining industry to boost the economy. Mining accounts for 6% of the gross domestic product (GDP), generates 60% of South Africa's export revenue and contributes hugely to corporate tax.

Zuma made the announcements amid concern that the GDP growth rate of 0.9% for the first quarter of this year signalled difficult days ahead for the economy.