Protracted strike in South Africa gold mines would hurt economy: minister

Reuters News
Posted: Sep 03, 2013 3:39 AM
Protracted strike in South Africa gold mines would hurt economy: minister

By Pascal Fletcher

PRETORIA (Reuters) - A protracted strike in South Africa's gold industry would harm Africa's largest economy and the government is ready to intervene to bring parties together, the mining minister said on Tuesday.

Gold miners were set to strike for higher pay from Tuesday, after talks between unions and companies broke down last week. A wave of strikes sweeping South Africa has sent the rand to four year lows and raised worries of slowing growth.

With stoppages in the auto industry and the construction sector already sapping the struggling economy, shutting gold mines could cripple an industry that has produced a third of the world's bullion but is now in rapid decline.

"If indeed we are going to have a protracted industrial action, it will impact negatively on the economy," minister Susan Shabangu told Reuters at a presidential briefing in Pretoria.

"If there is a need for government to intervene, we will engage the parties," she said.

Economists say South Africa's economy, already suffering from slow growth and high unemployment, call ill afford the lost output - estimated at more than $35 million a day - from an industry shutdown in gold.

Labour and management are poles apart on wages, with the dominant National Union of Mineworkers seeking 60 percent pay hikes for entry-level miners and its more hardline rival, the Association of Mineworkers and Construction Union pushing for 150 percent raises.

Companies say they cannot afford this in the face of soaring costs and depressed prices. The president of South Africa's Chamber of Mines, which represents the industry, has warned unions against building up workers' hopes.

"We are really very concerned," Shabangu said, adding that the sides in the dispute, needed to "find each other soon".

"We are urging them to consider the current situation," she added.

(Reporting by Pascal Fletcher; Writing by David Dolan; Editing by Jon Herskovitz)