Miners union threatens strike at South Africa's Amplats

Reuters News
Posted: May 16, 2013 5:29 AM
Miners union threatens strike at South Africa's Amplats

By Helen Nyambura-Mwaura and Sherilee Lakmidas

JOHANNESBURG (Reuters) - Miners at South Africa's Anglo American Platinum reported for work late Thursday, and a labor leader said the workers will strike on Friday in an escalation of unrest that sent the company's shares lower and the rand to a four-year low.

The threatened action is to protest Amplats' plans to cut as many as 6,000 jobs in a bid to return to profit, down from the 14,000 it initially proposed, and comes just as a two-day wildcat strike ends at platinum producer Longman.

"Workers are going underground; everything is normal," Amplats spokeswoman Mpumi Sithole told Reuters late on Thursday.

A branch leader with the Association of Mineworkers and Construction Union (AMCU) said earlier that miners would not work the overnight shift on Thursday, but another said later in the day that the action would commence on Friday.

"We decided that it would be tomorrow. It's not AMCU that have called the strike, it's the workers," said Evans Ramokga, an Amplats' labor leader also linked to AMCU.

Months of violent labor unrest in the mining sector last year, including the police killing of 34 strikers at Lonmin's Marikana mine, slowed the growth of South Africa's biggest economy and triggered credit rating downgrades.

On Thursday the prospect of another round of trouble sent the rand to four-year lows. Amplats shares fell more than 4 percent by the close and reached an eight-year low.

AMCU's leadership often distances itself from illegal strike action, but the leadership showed that it was in control this week, when leaders addressed the striking Lonmin miners and told them to return to the shafts, which the miners promptly did.

AMCU has succeeded in poaching tens of thousands of members from the once dominant National Union of Mineworkers (NUM).

More than 50 people have been killed in more than 12 months of unrest stemming from a turf war between the two unions. The rivalry was stoked over the weekend when an AMCU organizer was shot dead in a tavern.

The current action comes shortly before a round of wage talks being billed as the toughest since the end of apartheid in 1994, as shrinking company margins and falling commodity prices combine with rising worker militancy.

Sithole said Amplats had received no notification of an intent to strike. The company fell to a loss last year in part because of the strikes, which shut its mines near Rustenburg for months.


NUM, an ally of the ruling African National Congress (ANC), had enjoyed a near monopoly in the mining sector but started to lose members as a belief took hold that its leaders had become too close to management.

NUM says its rival AMCU has risen to prominence through violence and promises of unrealistic wage hikes at a time of razor-thin margins in the platinum sector in South Africa, home to 80 percent of known reserves of the metal.

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NUM also points to its own success in wringing above-inflation wage hikes out of mining companies over the past decade.

The unrest is also rooted partly in glaring income disparities within the mining industry and the wider society.

Patience is wearing thin two decades after the end of white rule as much of the black mine labor force, which is semi-literate and drawn from poor rural areas, still makes only a few hundred dollars a month even after years of big wage rises.

And with an election looming in a year, the ANC is worried about the prospect of big job losses and forced Amplats to scale back its initial plan to shed 14,000 positions.

The cabinet is "extremely, extremely concerned" about the latest unrest, Environment Minister Edna Molewa told reporters at a post-cabinet news conference on Thursday.

(Additional reporting by Sherilee Lakmidas and Olivia Kumwenda in Johannesburg and Wendell Roelf in Cape Town; Writing by Ed Stoddard; Editing by Jane Baird and Cynthia Osterman)