GO
Loading...

UPDATE 4-South Africa wildcat strikes spread to more mines

Wednesday, 3 Oct 2012 | 11:47 AM ET

* Kumba Iron Ore says 300 employees involved, limited effect

* Gold producer Harmony reports illegal strike at mine

* Spread of labour unrest ups pressure on Zuma government

* Action rattles investors in Africa's largest economy

(Adds miners' quotes, political challenge to Zuma)

By Ed Stoddard and Agnieszka Flak

JOHANNESBURG, Oct 3 (Reuters) - A series of wildcat miners' strikes in South Africa spread to the iron ore sector on Wednesday and hit another gold firm in an escalation of the labour unrest that is testing President Jacob Zuma's leadership.

The industrial action at Kumba Iron Ore , a unit of global miner Anglo American , further dented investor confidence in the continent's wealthiest economy as it showed the protests had moved beyond platinum and gold mines.

Workers at the Kusasalethu gold mine near Johannesburg, operated by South Africa's No. 3 bullion producer Harmony Gold , also downed tools in what management called an "unlawful" action launched outside the normal collective wage bargaining channels.

Zuma is under fire for failing to address and contain the rolling workers' protests demanding higher wages, which in mid-August led to the killing by police of 34 strikers at the Marikana platinum mine run by Lonmin .

The so-called "Marikana massacre" jogged painful memories of apartheid-era killings by the security forces and has kindled heated debate over glaring wealth inequalities persisting in South Africa since the end of white minority rule in 1994.

"President Zuma can see all of this. He is ignoring it as our president. Does he want us to die like the people in Marikana before he can act?" asked Sandile Diko, a miner at Gold Fields KDC West mine, west of Johannesburg, where 15,000 workers downed tools last month.

After seven weeks of labour unrest, as many as 75,000 miners, or 15 percent of the mining sector workforce, are already out on strike, while a national truckers' stoppage is squeezing fuel suppliers. If it drags on, some petrol stations could run dry, and some banks' ATMs could run out of cash.

The rand fell 1 percent against the dollar on Wednesday, partly due to the escalation of the mines conflict. CHALLENGE TO ZUMA

Kumba, one of the world's top 10 iron ore producers, said the wildcat strike at its giant Sishen Mine in the Northern Cape involved only 300 employees and was limited to one area in the open cast mine, leaving most of the facility unaffected.

Kumba's share price was over 4 percent lower on the news. Shares of Harmony Gold fell 2.8 percent in Johannesburg.

The recent weeks of labour strife, in which around 50 people have been killed, have stirred up criticism of the ruling African National Congress and the presidency of Zuma, who faces a challenge from ANC rivals ahead of a party leadership conference in December.

Despite the political pressure, Zuma is expected to be re-elected head of the ANC in the vote - teeing him up to win a second five-year term as South African president in 2014 - though he could face a serious challenge from Deputy President Kgalema Motlanthe.

In the early nomination process, the ANC's traditionally restive Youth League said it would back Motlanthe for president, calling for a "new generation of leaders".

In another illegal strike over wages by contractors at mining company Petmin , a security guard was hacked to death this week by knife-wielding assailants at the Somkhele mine in KwaZulu-Natal, local media quoted police as saying.

There are fears the strike "contagion" could spread to the coal mining sector and so threaten supplies to power utility Eskom, which is struggling to prevent a repeat of a 2008 crisis when the power grid nearly collapsed amid rolling blackouts.

Some 85 percent of the country's electricity is generated by coal-fired plants.

"NO TURNING BACK"

Kumba had been thought safe from the strikes because in December rank-and-file employees there who had worked for at least five years were given a lump sum of about 345,000 rand ($41,200) each after taxes as part of a share scheme.

This represented a fortune to workers earning as little as 7,000 rand a month. It was not immediately clear if any of the 300 reported strikers were among the 6,200 who had benefited from the plan.

Kumba produced 41.3 million tonnes of ore in 2011. World No. 1 platinum producer Anglo American Platinum

is grappling to resolve a strike at its Rustenburg operations in the country's "platinum belt" about 120 km (75 miles) northwest of Johannesburg.

Worker attendance at Amplats' Rustenburg mines has fallen to below 20 percent. Some 21,000 Amplats workers are striking.

Bosses at the world's fourth-biggest bullion producer, Gold Fields, where a three-week-old stoppage at the KDC West mine has hit production, have refused to negotiate with strikers over their wage demands.

"All we want is money," one of the striking miners, Sibusiso Ntjima, told Reuters. "We want it, and no turning back."

The spreading unrest has raised fears of a repeat of the Marikana violence and deaths, South Africa's bloodiest security incident since the end of apartheid.

An official enquiry into the killings began this week but adjourned its hearings on Wednesday until Oct. 22 to give lawyers more time to prepare and collect forensic and witness reports and post mortem information on the victims.

(Additional reporting by Sherilee Lakmidas in Johannesburg, Dinky Mkhize in Carletonville and Ed Cropley in Marikana; Writing by Jon Herskovitz; Editing by Pascal Fletcher and Will Waterman)

((Edward.Stoddard@thomsonreuters.com)(+27 11 775 3160)(Reuters Messaging: edward.stoddard.thomsonreuters.com@reuters.net))

Keywords: SAFRICA MINES/

  Price   Change %Change
AAL
---
LMI
---