23 January 2014

South Africa: Platinum Production At a Standstill

Platinum production in South Africa is at a standstill as mineworkers lay down their tools. It is the first walkout since the 2012 wildcat strike at Marikana in which police killed 34 miners.

A crowd of striking South African platinum miners gathered outside mines on Thursday (23.01.2014) dancing and singing some slogans. They are demanding a monthly wage increase of about 12,500 rand ($1,143, 838 euros), twice the amount they currently earn.

Although the employers maintain that the strikers' demands are unprecedented, the miners believe they deserve a pay rise, since their CEOs earn more than a million dollars per year.

"We are paid peanuts. And the cost of living is too high," one striking platinum miner at an Anglo American Platinum (Amplats) mine told Reuters news agency.

Amplats, with mines in Rustenburg, Union and Amandelbuilt, is among the top three platinum producers hit by the strike. The other two are Impala Platinum (Implats) and Lonmin. Together they produce half the world's platinum.

Chief executives of the mines say the amount asked by the miners is unaffordable because they themselves have higher production costs to grapple with.

"Striking is not a constructive solution if we are to return the company to a sustainable financial footing and secure existing jobs," Amplats chief executive Chris Griffith said in a statement.

According to the Association of Mineworkers and Construction Union (AMCU), which organized the strike by 70,000 mineworkers, the stoppage is to continue until the miners' demands are met.

'The backbone of South Africa's economy'

Some experts fear that the strike will seriously affect the earnings of some mines and could even bring the country's economy to a standstill.

"Some shafts have been complaining that they are operating at a loss and they might have to close," Ralph Mathekga, an independent political analyst, told DW's Africalink program.

"I don't think that they will be able to pay that amount of money while maintaining the current number of workers," Mathekga added.

The strike started just a day after a labor judge in South Africa ruled that a strike by the country's gold mine workers, which was also planned to begin on Thursday, may not go ahead until until a verdict due on January 30.

More than 40 people were killed in 2012 illegal strike in Marikana

Earlier this week, AMCU announced that the gold and platinum sectors would start their strike on Thursday. The Chamber of Mines then went to court in Johannesburg to stop the strike in the gold sector but not at the country's platinum mines.

Although AMCU has indicated the strike would be indefinite until the demands are met, the government is reported to be determined to end the dispute before the country's economy is damaged as was the case in the 2012 Marikana wildcat strike.

The 2012 illegal Marikana strike saw the killing of 34 people, who were shot by the police. Some analysts have warned that fresh strikes in the mining sector could cripple the country's economy.

"This is the backbone of our economy and this is a real problem," Michael Bagraim, a labor analyst, told DW. "We are going through very desperate times in South Africa and I'm pretty nervous for our economy."

President Jacob Zuma's office is also watching developments closely as the government prepares for general elections planned in three months time.

Mediation talks have been tentatively scheduled for Friday.

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