News / Economy

South Africa Platinum Strike Cripples Mine Companies

FILE - A miner gestures as they gather at Wonderkop stadium outside the Lonmin mine in Rustenburg, northwest of Johannesburg, Jan. 30, 2014.
FILE - A miner gestures as they gather at Wonderkop stadium outside the Lonmin mine in Rustenburg, northwest of Johannesburg, Jan. 30, 2014.
— Hope for a settlement this week of South Africa's prolonged platinum miners strike was dashed when the country's largest mining union boycotted a meeting chaired by South Africa's deputy president.
 
Thousands of platinum mine workers belonging to the country’s largest mining union, the Association of Mineworkers and Construction Union (AMCU), went on strike on January 23 demanding a monthly basic salary of $1,181. A series of talks to end the strike has so far failed.
 
On Thursday, South African Deputy President Kgalema Motlanthe convened a meeting of all stakeholders to discuss peace and stability in the entire mining sector. However, AMCU boycotted the meeting and instead marched to the Impala Platinum Mine headquarters in Johannesburg to demand better wages.
 
Union leader Joseph Mathunjwa vowed to keep the workers on strike until their demands were met. He had no kind words for the mine bosses.
 
"Some of them, they have never even, been to those underground harsh conditions that we are facing 365 days, but they are walloping immense salaries. Why?" asked Mathunjwa.
 
South Africa's Minerals Resources Minister, Suzan Shabangu, made a passionate call for all involved to bring the strike to an end.
 
"The situation is highly destitute (desperate), indeed we would like to see parties being able to resolve the matter. As we know that this strike is not only hurting the workers it’s hurting the country too. We really want a resolution… to the strike itself," said Shabangu.
 
Economists have warned that the strike is already having a negative impact on both the mining industry and the economy at large. So far, platinum mines have lost over $944 million in revenue while workers have lost $378 million in salaries.
 
Kevin Lings, an economist from the investment firm Stanlib, said continuation of the strike could collapse the mining sector.
 
"It’s very difficult for business to move forward, when you have got this much labor unrest, whether its mining or manufacturing, it’s usually disruptive to business to have this much labor unrest, and obviously we need to implement policy more effectively from a government perspective, in terms of infrastructure development," said Lings.
 
The strike is taking a toll on companies and workers alike. Lonmin, a giant platinum mine, recently asked its non-striking workers to go on leave, saying this will cut costs and help the company to survive.
 
With mining contributing about 20 percent of South Africa’s gross domestic product (GDP), Leon Louw, Executive Director at the Free Market Foundation, an economic think tank, said the economy is taking a beating.
 
"The South African economy, is now stagnating, or growing at very, very low rates. This is all very tragic, very sad and very serious and not being taken nearly seriously enough by most commentators and by the government in particular," said Louw.
 
Daryl Glaser, Head of Department of Political Studies at the University of Witwatersrand, said the government’s failure to properly resolve issues in the mining sector and the economy at large could haunt the ruling African National Congress in the coming elections.
 
"The dissatisfaction with the ANC is potentially providing recruits to new and breakaway political parties. They potentially find recruits in workers who are unhappy. It remains to be seen how much advantage they are going to be able to take of the dissatisfaction," said Glaser.
 
With only a few weeks left before South Africa's national elections on May 6, it is not clear how long the government can afford to wait as the platinum sector strike punishes workers, business and the economy.

You May Like

Lebanese Media Unite to Support Palestinians in Gaza

Joint newscast billed as Arab world’s first unified news bulletin in support of Hamas-controlled Gaza Strip More

Photogallery Australian PM Alleges ‘Coverup’ at MH17 Crash Site

Meanwhile, Russia's ambassador to Malaysia denies plane's black boxes were opened before they were handed over to Malaysian officials More

Despite Advances in AIDS Treatment, Stigma Lingers

Leading immunologist tells VOA that stigma is often what prevents those infected with disease from seeking treatment More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
IAEA: Iran Turns its Enriched Uranium Into Less Harmful Formi
X
July 22, 2014 10:26 AM
Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video Relic of Saint Draws Catholics Worried About Immigration Issue

A Roman Catholic saint who is a figure of devotion for those crossing the border into the United States is attracting believers concerned about the plight of undocumented immigrants. Mike O'Sullivan reports from Los Angeles, where a relic of Saint Toribio has drawn thousands to local churches.
Video

Video Ukraine Rebels Surrender MH17 Black Boxes

After days of negotiations, a senior separatist leader handed over two black boxes from an airliner downed over eastern Ukraine to Malaysian experts early Tuesday. While on Monday, the U.N. Security Council unanimously demanded that armed groups controlling the crash site allow safe and unrestricted access to the wreckage.
Video

Video In Cambodia, HIV Diagnosis Brings Deadly Shame

Although HIV/AIDS is now a treatable condition, a positive diagnosis is still a life altering experience. In Cambodia, people living with HIV are often disowned by friends, family and the community. This humiliation can be unbearable. We bring you one Cambodian woman’s struggle to overcome a life tragedy and her own HIV positive diagnosis.
Video

Video Nature of Space Exploration Enters New Age

Forty-five years ago this month, the first humans walked on the moon. It was during an era of the space race between the United States and the Soviet Union. World politics have changed since then and -- as Elizabeth Lee reports -- so has the nature of space exploration.
Video

Video Chicago’s Argonne Lab Developing Battery of the Future

In 2012, the U.S. Department of Energy’s Office of Science awarded a $120 million grant to a new technology center focused on battery development - headquartered at Argonne National Laboratory in suburban Chicago, Illinois. As VOA’s Kane Farabaugh reports, there scientists are making the next technological breakthroughs in energy storage.
Video

Video In NW Pakistan, Army Offensive Causes Massive Number of Displaced

Pakistan’s army offensive in North Waziristan has resulted in the large-scale displacement of the local population. VOA's Ayaz Gul reports from northwest Pakistan where authorities say around 80 percent of the estimated 1 million internally displaced persons [IDPs] have settled in Bannu district, while much of the remaining 20 percent are scattered in nearby cities.
Video

Video Kurdish Peshmerga Force Secures Kirkuk, Its Oil

The Kurdistan regional government has sent its Peshmerga troops into the adjacent province of Kirkuk to drive out insurgents, and to secure the area's rich oil fields. By doing this, the regional government has added a fourth province to the three it officially controls. The oil also provides revenue that could make an independent Kurdistan economically strong. VOA’s Jeffrey Young went out with the Peshmerga and filed this report.
Video

Video Malaysia Reeling: Second Air Disaster in Four Months

Malaysia is reeling from the second air disaster in four months involving the country’s flag carrier. Flight 340 vanished in March and despite an extensive search, no debris has been found. And on Thursday, Flight 17, likely hit by a surface-to-air missile, came apart over eastern Ukraine. The two incidents together have left more than 500 people dead. VOA Correspondent Steve Herman reports from Kuala Lumpur.

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.