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South Africa: Labor unrest as miners at Lonmin Platinum engage in industrial action
South African workers of the world’s third largest platinum producer Lonmin have engaged in industrial action, halting all of the company’s mine operations and reigniting fears of unrest that rocked the industry last year.
The platinum belt towns of Rustenburg and Marikana, which saw labor unrest at Lonmin and other platinum producers last year, are a flashpoint of labor strife with tensions running high over looming job cuts and wage talks
Further complicating the picture is a turf war between the Association of Mineworkers and Construction Union (AMCU) and the National Union of Mineworkers (NUM), which has lost many of its members to the AMCU.
A spokesman of the National Union of Mineworkers said Tuesday’s industrial action appeared to stem from workers’ anger over the weekend murder of a member of the Association of Mineworkers and Construction Union.
According to police, a 46-year-old man “alleged to be the regional organizer of AMCU” was killed in a Rustenburg tavern on Saturday when an assailant shot him four times with a 9mm pistol.
The share price of Lonmin slid almost 7 percent and the South African currency – (the rand), hit 3-week lows, as investors worried about a repeat of 2012’s labor turmoil, which hammered platinum and gold production and triggered credit downgrades for Africa’s largest economy.
“Peace and returning to normal production in our mining industry is absolutely critical to our economy so I’m hoping that everybody sits down together and solves their problem,” South Africa’s Finance Minister Pravin Gordhan said on Tuesday in Cape Town, reacting to the latest Lonmin stoppage.
The labor unrest in the mines is mainly rooted in glaring income disparities and low wages for a workforce that is largely drawn from the rural areas of South Africa.
Platinum’s spot price rose 1.5 percent on news of the strike, widening its premium over gold to more than US$60 an ounce, the highest in a month.
Lonmin spokeswoman Sue Vey said all 13 shafts at the company’s facility were not working. She said there was no indication at this stage as to why employees had engaged industrial action.
The company urged the striking miners to return to their posts, adding their action could lead to more job losses.
The Lonmin stoppage occurred during Platinum Week, an annual gathering in London of industry executives and analysts. Lonmin workers also downed tools for one day in March during a visit by media, embarrassing the company as it tried to show how it had recovered from last year’s problems.
Lonmin’s acting chief executive Simon Scott told reporters in an interview late on Monday the company would tell unions to curb expectations of forthcoming wage talks, warning it remains under pressure despite reporting robust first-half earnings.
“While the results are a significant improvement over last year, this is still not an industry that is making a lot of money. This is still not an industry that is giving shareholders a huge return,” he said.
Social tensions in the area have been further stoked by plans by Anglo American Platinum, the world’s largest producer, to slash 6,000 jobs in a bid to restore profits. That is less than half the 14,000 initially targeted but unions have still vowed to fight against the lay-offs.
Source: Reuters