September 17, 2012 3:12 pm

South Africa warns of cost of unrest

Jacob Zuma, South Africa’s president, on Monday called for a speedy resolution to a wave of wild-cat strikes in the nation’s vital mining sector, warning that the industrial strife had already cost Africa’s largest economy half a billion dollars.

Mr Zuma said the value of production in the gold and platinum sectors lost to stoppages over the last nine months was close to R4.5bn ($548m), while the indirect impact of strike actions had cost the national fiscus R3.1bn.

“We cannot afford to go into recession and revert to the 2008 and 2009 period where the country lost close to 1m jobs, which we are still battling to recover,” he told delegates at a conference of the Congress of South African Trade Unions (Cosatu). “We have to find a way to restore workplace stability and labour peace. Violence cannot become the culture of labour relations.”

On Monday, Julius Malema, the firebrand former youth leader of the ruling African National Congress, was reportedly barred by police from addressing strikers as they continued a crackdown on violence and intimidation by striking mineworkers around Marikana in the country’s rich platinum belt

Mr Malema has been accused of stoking tensions and politicising the unrest as he has toured striking miners, pledging to make the sector “ungovernable”. The Hawks, a unit of the South African police, have opened an investigation into allegations of incitement against him after charges were brought by Solidarity, a mineworkers’ union.

The platinum sector has been gripped by a crisis since police shot and killed 34 striking miners, employed by Lonmin, the London-listed company, on August 16.

The unrest spread to other mines and forced Anglo American Platinum, the world’s largest platinum producer, to suspend operations at five of its shafts in Rustenburg, to ensure the security of its 26,000 workers. The company said it hoped to resume operations on Tuesday as the police action brought some stability to the area, but some of its staff have reportedly joined the strike.

And the more than five-week strike at Lonmin, which has forced the company to halt its South Africa operations, continues. In January and February, Impala Platinum experienced a six-week strike which cost it R2.8bn in lost production.

Hundreds of thousands of of people are employed in the mining sector. Last year, total platinum sales were valued at about R82bn, while gold sales were R66bn, according to Roger Baxter, a senior executive at the Chamber of Mines.

The mining industry is also a key source of foreign currency for the state, which saw its current account deficit widen to 6.4 per cent of GDP in the second quarter, a ratio last seen in 2008.

The industrial action has been complicated by a rivalry between the established National Union of Mineworkers – which is Cosatu’s biggest affiliate – and the Association of Mineworkers and Construction Union, a newer, more militant union that has been gaining influence in the platinum sector.

The unrest has been damaging for both Cosatu and the ANC, which is riddled by factionalism as it prepares to hold a conference in December at which its leaders will be up for election. Speculation has been rife that Mr Zuma, who has been criticised for weak leadership and being soft on corruption, could face a leadership challenge at the meeting.

On Monday, he chastised “some political party leaders” who have compared the security crackdown in Marikana to apartheid-era measures for “unashamedly using a tragedy to score political points”.

Cosatu, a powerful member of the ANC-led governing alliance, is also blighted by factionalism and the labour unrest has exposed dissatisfaction with the NUM as workers’ frustrations over pay and conditions mount.

“We cannot hide the fact that the plight of workers is being used by some to weaken strategic components of the alliance seen as a threat towards Mangaung [the ANC’s conference],” said Sidumo Dlamini, Cosatu’s president.

However, both Mr Dlamini and Zwelinzima Vavi, Cosatu’s general secretary, were re-elected unopposed at the union’s conference in spite of speculation that they risked facing challenges.

Lonmin is halting construction of a new mine shaft, putting 1,200 people out of work.

Related Topics

Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.

NEWS BY EMAIL

Sign up for email briefings to stay up to date on topics you are interested in

SHARE THIS QUOTE