Mail & Guardian

Amplats miners end protest

17 Jan 2013 07:44 | Ed Stoddard

Workers at three of Amplats's South African mines went the walkout from Tuesday's overnight shift, hours after the company, a unit of London-listed Anglo American, announced plans to mothball shafts and cut 14 000 jobs.

"The strike was only for last night," Amplats labour leader Evans Ramokga told Reuters on Wednesday night. He added workers would press management to find a way to head off job cuts, which were equal to about 3% of South Africa's overall workforce in the mining sector. Amplats officials were not immediately available to comment.

Amplats earlier said an unspecified number of employees at its Khomanani, Thembelani and Tumela mines, in the heart of South Africa's platinum belt,  refused to go underground.

Only Khomanani was among the mines slated for indefinite closure or sale by the company, so the wildcat action indicates labour activists had persuaded miners in other shafts to join sympathy strikes.

The protests, which were expected after Anglo American unveiled its restructuring plans, combined with strong government objections to job cuts demonstrated how difficult it would be for the mining giant to push through changes critical for its recovery and that of its loss-making unit.

"The restructuring itself was fairly ambitious, it was probably not as much as some people wanted and more than others expected," analyst Jeff Largey at Macquarie in London said.

"Now it comes down to execution risk and the way things are looking right now, it is going to be more challenging than Anglo thought."

The mining communities and shantytowns around the platinum belt city of Rustenburg have been a flashpoint of labour and social unrest.

Shares shafted
Amplats's share price closed nearly 6% lower, while Anglo American's was down almost 3% in late afternoon trade, one of the biggest fallers on Britain's top share index .

South Africa sits on about 80% of the known reserves of platinum, used to build emissions-capping catalytic converters in automobiles, but weak demand has depressed the price. It rallied to three-month highs on Tuesday because of supply concerns triggered by the Amplats proposals.

The planned job cuts and closures risk provoking a repeat of the violent wildcat strikes in the gold and platinum sectors last year that left more than 50 people dead and slowed the growth of Africa's largest economy.

They have also stirred anger from the government and ruling ANC as they grapple with a jobless rate of over 25% and growing social discontent ahead of next year's general elections.

Mineral Resources Minister Susan Shabangu lashed out at Amplats again on Wednesday after earlier saying the miner could have its compliance with legislation reviewed, calling the company and its chief executive Chris Griffith "arrogant."

"Amplats decided to undermine all of us. Amplats continues to be arrogant ... They've been playing games with us," she said during an interview with SAfm.

Anglo, which said its plan was critical to creating a sustainable platinum business, said in a statement that it took its regulatory and social responsibilities seriously.

Adding to its woes, Kumba Iron Ore, also part of the Anglo stable, said on Wednesday that its full-year profit is likely to have fallen by about a third, hit by lower export prices and an illegal strike at its main mine.

Fuelled by glaring income disparities within the industry and the wider economy, the labour unrest is also rooted in a bloody turf war between the newcomer Association of Mineworkers and Construction Union and the dominant National Union of Mineworkers .

A fresh wave of strike action on South Africa's restive platinum belt and elsewhere could be crippling to an industry battling with soaring wage and power costs and aging mines that are the deepest in the world.

"Everyone expected that when [Amplats] came through there would be some disruption, some protest. It is, though, somewhat surprising to see how far the government in particular has swung in terms of standing with the masses, playing up the popular rhetoric," Macquarie's Largey said.

Strikes would also further erode investor confidence. South Africa's rand weakened against the dollar and investors pushed bonds lower on Wednesday because of the brewing labour unrest. – Reuters

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