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South Africa Considers External Mediation as Mining Troubles Spread

Liza Jansen, special for CNBC.com
Tuesday, 28 Aug 2012 | 10:51 AM ET

Following the on-going violence at operations of the world’s third-largest platinum producer Lonmin, the South African government wants to bring in external mediation to resolve disputes over pay and conditions of mining workers, Susan Shabangu, mines minister for the country, told CNBC Africa on Tuesday.

A Citic Pacific safety hat at the company's Sino Iron project in Karratha, Western Australia.
Carla Gottgens | Bloomberg | Getty Images
A Citic Pacific safety hat at the company's Sino Iron project in Karratha, Western Australia.

“We have to find a mechanism to deal with the matter…and we consider bringing in external mediation,” Shabangu said.

Forty four people were killed in a labor disputeat Lonmin’s Marikana mine near Johannesburg, South Africa nearly two weeks ago. Since then, Lonmin’s operations have been suspended by a strike among around 3,000 workers, and the company said Tuesday that only 8 percent of its workers had reported for duty so far.

The South African minister said that in a meeting with the country’s labor minister last week it was decided that the various unions will be pulled together in a way that wouldn’t undermine the process of collective bargaining. She said the companies should also come together so as not to undercut each other.

“The platinum sector has to come together and has to stop working in isolation and competing,” Shabangu said.

Robert Besseling, senior Africa forecaster at Exclusive Analysis, told CNBC the problems in the Marikana mine are far from over. “The fact that only 1 in 10 workers returned to work on Monday shows how the unions have lost complete control over the situation,” he said.

Besseling forecasts that the situation can extend throughout the next three months and has warned his clients about the possible risk of contagion to other mining projects in South Africa.

High levels of intimidation were also reported at Solidarity, a trade union which represents skilled workers, and workers at another South African mine run by Eastern Platinum were reportedly blocked from going to work on Monday by colleagues, according to the National Union of Mineworkers.

The violence is the result of a bloody turf war between the dominant National Union of Mineworkers (AMCU) and the small but militant Association of Mineworkers and Construction Union (AMCU), which has been gaining ground in South Africa’s mining sector.

By Liza Jansen, special for CNBC.com / Twitter: @lizajansen

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