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Tuesday 21 October  

S.Africa's mine unrest ends, but job losses loom

Published on 15 November 2012 - 5:14pm
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Thousands of miners returned to work on Thursday at Anglo American Platinum, putting a lid on the most devastating and costly bout of labour unrest in South Africa in nearly a century.

The strikes started three months ago at the London-listed Lonmin mine in South Africa's northwest platinum belt, before spreading to other mines and other sectors.

Unions estimate that in total over 140,000 workers downed tools across the country, most of them in the gold and platinum trade.

Deadly violence ensued, leaving more than 50 dead.

Estimates put the cost of the strikes at $1.2 billion, roughly one percent of quarterly gross domestic product (GDP).

Over the months firms rolled out incentives and threats and more incentives. One mine by one, miners returned to work.

Amplats' more than 12,000 workers were the last major group of miners who refusing to go to the underground -- until the world's top platinum producer enticed them with new monthly allowance and a one off bonus this week.

But as the dust settles, mining firms are counting their losses.

Workers now face the prospect of job losses and the outlook on Africa's economic powerhouse is dim.

"This is the messiest, most violent, destructive and costly strike in the mining sector, in maybe 90 years," Peter Major mining analyst at Cadiz Corporate Solutions said.

Miners are likely to hold on to their jobs for now, but some are likely to be laid off once companies work out their long term plans, having factored in the impact of the strike.

At this state "nobody knows what it's going to cost in terms of time or money," said Major.

"Even the mining managers don't know how much they are going to rationalise. They probably need three or four months before they make an educated guess."

What is certain is that -- in a country where one in every four people is unemployed -- the ranks of the jobless will swell.

The scale for cuts is vast. The mining sector currently employs 500,000 people -- and almost double that number if ancillary industries are included -- making it one of the largest employer in South Africa.

"Without doubt there is going to be less people working on the mines in South Africa," Major said.

Solidarity, a mainly white-collar union, says it is already in retrenchment negotiations at five mining companies.

Some lay-offs had been on the books before the work stoppages of the past three months.

Mine operators were already buckling under low mineral prices and high production costs.

"Although not all strikes necessarily result in retrenchments, they definitely cause uncertainty in the industry," said Solidarity's spokesman Johan Kruger.

At least 14 mining companies have been touched by strikes this year alone, according to unions' tally.

Investors have been spooked and the urge to spend may remain low for some time to come.

A new bout of strikes, this time in the farming sector, complicates any plans by President Jacob Zuma's administration to improve the country's image in the eyes of foreign investors.

The country is "probably going to be on an all-time low" in terms of foreign direct investment inflows, said Major.

The mines crisis has slowed South Africa's growth to 2.5 percent this year.

  • Striking mine workers protest on October 30, 2012 at the Jabula mine in ...
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