Lonmin, whose Marikana mine has seen worst violence, halts work on new shaft and puts 1,200 miners out of work
Unrest at South Africa’s platinum and gold mines has cost the industry 4.5bn rand (£335m) in lost output, President Jacob Zuma said, as the company at the centre of the strikes closed a shaft putting 1,200 miners out of work.
Although two mines reopened on Monday there was still no end in sight to the protests over pay which have seen 45 people killed in weeks of unrest. Zuma said that aside from the losses to mining companies, the stoppages had cost the South African treasury 3.1bn rand.
Lonmin, the London-listed company whose Marikana mine near Johannesburg has seen the worst violence, said it was losing production of 2,500 ounces (77kg) each day the strike continues. The world’s third biggest platinum producer, Lonmin is in danger of breaking its banking covenants because of the dispute and it said on Monday that it was halting work on a new shaft and would not require 1,200 contract workers.
As tension continued to run high, South African police stopped ANC renegade Julius Malema from addressing striking miners at Marikana. Malema, a rebel expelled from the ANC, has become Zuma’s most strident critic and has urged strikers to make mines “ungovernable”.
Following the government’s promise to get tough on strikers and those inciting violence, police, some armed, surrounded Malema as he arrived in Marikana, 60 miles north-west of Johannesburg, where police shot dead 34 strikers last month.
Strikers also said they would keep shut four mines run by the world’s top producer, Anglo American Platinum (Amplats), which the company aims to reopen on Tuesday.
“There is no need to resort to violence. I believe we must not encourage that,” Zuma told a conference of the Congress of South African Trade Unions, a partner with the African National Congress (ANC) in the governing alliance.
Some of the miners gathered at a football pitch in the town to hear Malema speak, threw stones at a police car as officers escorted him from the area.
Aquarius Platinum’s Kroondal mine and Xstrata’s chrome operation near the platinum belt city of Rustenburg reopened on Monday. But the situation on the ground remained tense, and Xstrata said that miners who had chosen to return to work had been subjected to intimidation by striking colleagues.
The unrest has its roots in a bloody turf war for members between an upstart union and the dominant National Union of Mineworkers (NUM) – a key political base for the ANC – but it is now unclear who the strikers are taking their directions from.
One workers’ representative dismissed Amplats’ plan to reopen its Rustenburg mines as a “joke”.
“For us, the reality is that the general strike is on,” Mametlwe Sebei, a self-styled Rustenburg community leader and Marxist politician, told Reuters. “We are going to be demonstrating in defiance. We will not be intimidated.”
Amplats management was “whistling in the dark” if it believed the mines would reopen on Tuesday, he said.
“They can deploy the army, they can be shooting people, shooting old men in their shacks, teargassing young kids … but let us be clear, there will be repercussions.”
South Africa is home to 80% of known reserves of platinum, the price of which has gained around 20% since the Marikana shootings on 16 August.
Police raided a Lonmin hostel on Saturday and seized spears, machetes and other weapons from strikers. They later used rubber bullets and teargas to disperse groups of protesters. The army has also been brought in to help restore order.
On Monday, police arrested 42 people at a mine owned by RBPlat and Amplats who were on an illegal strike.
Lonmin said mining activity at Marikana remained minimal and lowered its full-year production guidance to between 685,000 and 700,000 saleable ounces from 750,000 ounces. Lonmin also said it would temporarily close a shaft at its Karee mine, which had been meant to boost output for the struggling company.
On Friday, Lonmin workers dismissed an initial pay offer as way below the 12,500 rand a month basic pay sought by members of the militant Association of Mineworkers and Construction Union (AMCU), which is challenging the dominance of the NUM. Lonmin, which is offering increases of between 9% and 21%, said 12,500 rand would put thousands of jobs at risk and challenge the viability of the business. Basic pay for most underground workers is currently around 5,400 rand.
The ANC has criticised companies for paying lip service to the mining charter, which seeks to give workers and communities a bigger share of mineral wealth and rectify disparities of white apartheid rule.
“Mining remains the bedrock of the South African economy, and yet the abject poverty and squalor surrounding mining areas remains a matter of deep concern,” it said in a statement.
“The current instability at Marikana thus poses challenges to the growth of the sector and the international image of the country,” the ANC said. Reuters
Move dashes hopes of ending five weeks of industrial action which could be ‘extremely damaging’ to country’s economy
Strikers at Lonmin’s Marikana mine rejected a pay offer on Friday, dashing hopes of ending five weeks of industrial action that has swept through South Africa’s platinum sector and laid bare the power struggle in the ruling ANC.
Workers at the mine, where police shot dead 34 protesters last month, dismissed the offer as way below the 12,500 rand (£925) a month sought by members of the militant Association of Mineworkers and Construction Union (AMCU).
“We are not interested,” striker Molifi Phele said as hundreds of stick-waving demonstrators chanted and danced around him on the sun-bleached grass in the heart of the “platinum belt”, 100km north-west of Johannesburg.
“What he is offering cannot buy you anything. All we want is 12,500.”
The killings at Marikana on 16 August have poisoned industrial relations across the sector and could be “extremely damaging” to the economy, finance minister Pravin Gordhan said in a shift of tone from last week.
The rand fell 3% on Wednesday as the unrest engulfed Anglo American Platinum, the world’s biggest producer, and ripples have reached the bond market amid concerns Pretoria might resort to throwing money at the problem.
“Things could get really ugly,” said Manik Narain, an emerging market strategist at UBS in London. “There is a risk the government will respond to the unrest with fiscal stimulus, which will not go down well with rating agencies.”
On Friday police fired teargas and stun grenades to disperse another group of striking miners at an Aquarius Platinum plant in the area.
Aquarius said it had closed the mine as a precaution. Global miner Xstrata did the same at a nearby chrome plant.
Prosecutors drop charges against 270 miners accused of killing striking colleagues, but say they may be recharged later
South African prosecutors have provisionally withdrawn murder charges against 270 miners who had been accused of killing 34 striking colleagues shot dead by police, but said they could be recharged when investigations are complete.
Public anger had been mounting at the charges, made under an apartheid-era law under which the miners were deemed to have had a “common purpose” in the murder of their co-workers.
The police killing of the strikers last month at the Marikana mine, run by platinum producer Lonmin , was the worst such security incident since the end of white rule in 1994, and recalled scenes of state brutality from that era.
“Final charges will only be made once all investigations have been completed. The murder charges against the current 270 suspects will be formally withdrawn provisionally in court,” Nomgcobo Jiba, the acting national director of prosecutions, said in a televised news conference.
The miners will be released from prison starting this week. In all, 44 people were killed in the wave of violence stemming from an illegal strike and union turf war.
Top members of the ruling African National Congress had also expressed dismay at the charges as a public backlash gathered.
“We are all surprised and confused by the national prosecuting authority’s legal strategy,” the ANC’s chief whip in parliament said on Friday.
The ANC, whose members were gunned down by police at protest rallies and targeted with draconian laws before Nelson Mandela’s election as the country’s first black president, has been criticised for using similar tactics now that it is in power.
The current president, Jacob Zuma, seeking re-election in December as the leader of South Africa’s dominant party, has seen his support erode over the killings and the state’s handling of the matter.
His enemies say he is more interested in protecting the industry and powerful labour groups than the miners.
Talks to end the strike at Lonmin, the world’s third largest platinum producer, were set to resume on Monday after weekend funerals for the slain workers.
Lonmin’s mines have been idle for three weeks, and labour strife has spread from the platinum sector to gold, where a quarter of the 46,000-strong workforce at Gold Fields have staged a wildcat strike, further unsettling investors.
In the case of Lonmin, the strike and violence stem from a turf struggle for members between the dominant National Union of Mineworkers (Num) and the small but militant Association of Mineworkers and Construction Union (AMCU), which has flared across the platinum belt.
The stakes are high as South Africa sits on about 80% of the world’s known reserves of the precious metal, used to make catalytic converters for automobiles.
The price of platinum has been depressed by weak demand, which has put pressure on industry margins at a time when power and labour costs have been rising rapidly. The recent strife has pushed the price up by about 8%.