S.Africa rand drops to 3-1/2 year low as Amplats fires strikers

* Market fears government not in control as strikes spread

* Long-dated bonds hit by long-term inflation worries

By Vuyani Ndaba

JOHANNESBURG, Oct 5 (Reuters) - South Africa's rand tumbled against the dollar on Friday to near a 3-1/2 year low and bonds weakened after Anglo American Platinum said it had dismissed around 12,000 workers who went on an illegal strike.

The rand weakened almost 2 percent to 8.6727 against the dollar at 1404 GMT, near the 8.71 level last seen in May 2009, as labour unrest intensified across major industries in Africa's biggest economy.

"It would appear the news that the 12,000 strikers had been fired had not been well received by the markets," William Van Rijn, a trader at Nedbank, said.

More than 75,000 miners, or 15 percent of the workforce have gone out on wildcat strikes, which were spreading beyond the mining sector. A strike by more than 20,000 truckers has caused some petrol stations to run dry and delayed product deliveries nationwide.

Investors feared the government was not in control of the situation as selling swept across the foreign exchange and fixed income markets, with some traders already touting 9.00 rand against the dollar.

"We've got no leadership in this country to arrest the strikes. The market is going to make them pay." Ian Scott, a portfolio manager at Stanlib, said.

Government bonds were hit along with the currency, despite having made strong gains in the last couple of months ahead of their inclusion in Citi's World Government Bond Index, which was formally sealed on Monday.

Bond yields rose sharply, with yields on the three-year bond

up as much as 13 basis points to 5.45 percent and on the 2026 bond jumping 17.5 bps to a session high of 7.7 percent.

Rand Merchant Bank (RMB) said in a note to clients there was growing evidence that demands for higher wages were spilling into other industries, driving the long-term trend in inflation.

"Increased inflation uncertainty will be reflected in a higher inflation risk premium in the long-end of the yield curve." RMB said.

(Reporting by Vuyani Ndaba; Editing by Jon Herskovitz and Jane Baird)

((vuyani.ndaba@thomsonreuters.com)(+27 11 775 3157)(Reuters Messaging: vuyani.ndaba@thomsonreuters.com@reuters.net))