Lonmin miners strike in South Africa, unnerving investors

Reuters News
Posted: Mar 05, 2013 9:02 AM
Lonmin miners strike in South Africa, unnerving investors

By Sherilee Lakmidas

MARIKANA, South Africa (Reuters) - Thousands of miners remained on strike at two shafts in South Africa's Marikana platinum mine on Tuesday, operator Lonmin Plc said, revising an earlier statement that they had gone back to work.

The conflicting statements sent platinum prices, South Africa's rand and Lonmin's shares on a bumpy ride, highlighting nerves over the health of the country's key mining sector after months of labor unrest.

Disruptions at Marikana are particularly closely watched as it was the site where 34 striking miners were shot dead by police last August in South Africa's deadliest security incident since the end of apartheid in 1994.

Workers affiliated to the militant Association of Mineworkers and Construction Union (AMCU) refused to go underground on Tuesday, demanding the closure of the offices of a rival union, said the mining group.

The company initially said workers from four shafts took part in an illegal stoppage, then returned to work. It later said miners from the Saffy and Newman shafts were still out.

Lonmin organized a media visit to the mine on Tuesday to show journalists how it was recovering from the unrest.

Lonmin spokeswoman Sue Vey said the miners had taken advantage of the presence of the world's media to stage a strike and make their point.

"They made use of the opportunity to convey their message. They have been heard," she said.

AMCU Members are demanding the closure of the offices of the rival National Union of Mineworkers because they say it is no longer the largest body representing workers there.

The turf war between AMCU and NUM, which is a powerful political ally of the ruling African National Congress, was at the heart of much of the unrest that hit the platinum and gold mining sectors in South Africa last year, triggering labor violence that killed over 50 people.

The union rivalry has shaken investor confidence in Africa's largest economy and the world's top platinum producer and led to credit downgrades for the country.

The rand initially fell to a session low of 9.1173 after Lonmin said its workers were refusing to go underground and then recovered after the company said the strike was over. It did not fall again when the company said this was not the case.

Lonmin's share price fell into the red, then pared some of those losses before easing again to be almost 2 percent lower on the day.

What Does Female Empowerment Mean?
Dennis Prager

Platinum prices rose as high as $1,589.50 an ounce in the wake of the initial news, up 1.4 percent on the day, from around $1,577.50 immediately before the announcement. The white metal regained a premium over gold of around $5 an ounce but then eased back a bit to parity with bullion.

Investors are also nervously monitoring union reaction to plans by Anglo American Platinum, the world's top producer of the precious metal, to restore profits by mothballing two mines and cutting up to 14,000 jobs.

The platinum belt northwest of Johannesburg remains a flashpoint of social and labor tension after it was the scene of riots last year and widespread intimidation as AMCU recruited workers angered at the NUM leadership, which they see as out of touch with the rank and file and too close to the ANC.

Glaring income disparities and grinding poverty in the shantytowns around the platinum mines have also fueled the violence.

(Additional reporting by Jan Harvey in London; Writing by Ed Stoddard; Editing by Andrew Heavens)