Labor strife returns in South Africa's platinum belt

MARIKANA, South Africa Mon Aug 27, 2012 10:56am EDT

1 of 3. Mine workers gather while on strike near the scene of a shooting at Marikana, in the north western province August 27, 2012.

Credit: Reuters/Mike Hutchings

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MARIKANA, South Africa (Reuters) - Labor strife returned to South Africa's platinum sector on Monday, derailing London-based Lonmin's efforts to restart mining and fanning fears of a resurgence of the violence that has killed 44 people this month.

Workers blocked colleagues from going down mine shafts and used threats of violence to snarl transport at Lonmin's Marikana mine - where 10 people were killed in a union turf war and police shot dead 34 striking miners.

Last week, South Africa held a week of mourning for those killed in the worst violence of its kind since the end of apartheid, which drew attention to the persistent inequality in pay and living standards in Africa's biggest economy.

The miners' strike has raised fears of cuts in supplies of the precious metal and pushed the spot price of platinum up 10.5 percent over the past fortnight. South Africa has some 80 percent of the world's known platinum reserves.

Suspected police brutality and the problems the government faces in brokering a deal between the rival unions have turned up the heat on the ruling African National Congress and stoked concern about wider labor disputes in the country.

"What we have seen is that if you don't stand up as people, nothing is going to change," said mine worker Thebe Seshanke.

Lonmin, which has suspended most operations for the past two weeks because of a wage strike by 3,000 workers, said only 13 percent of its 28,000-strong workforce had shown up on Monday morning - far too few to restart mining operations.

"There have been incidents of intimidation towards bus drivers overnight as well as intimidation of Eastern's workers this morning, preventing them from coming to work," Lonmin said in a statement, referring to its eastern operations, which had avoided such incidents until now.

Police said there had been reports on Monday of assaults, but gave no details.

Lonmin is the world's third largest producer of platinum, the white metal used in car catalytic converters and jewelry, and accounts for 12 percent of global output. It is losing about 2,500 ounces a day.

The violence stemmed from a bloody turf war, which has been spreading through the sector, between the dominant National Union of Mineworkers (NUM) and the small but militant Association of Mineworkers and Construction Union (AMCU).

DISSATISFACTION WITH NUM

About 2,000 workers, some carrying sticks and whips, gathered on Monday near a hill where police shot dead striking miners on August 16. Five armored police vehicles were parked nearby and a police helicopter had earlier hovered overhead.

The AMCU has tapped a swelling vein of discontent with the NUM, whose leaders are increasingly seen as out of touch and too close to their political ally - the ruling ANC.

The strikers, who are rock driller operators, have been demanding a monthly wage of 12,500 rand ($1,500) for their tough and dangerous job. The company says they get about 9,800 rand with an average monthly bonus of 1,500 rand.

Separately, the Independent Police Investigative Directorate said it was investigating more than 100 cases in which police are suspected of assaulting protesters in custody. About 260 miners appeared in a court near Marikana to face charges ranging from murder and attempted murder to intimidation.

ANC insiders say the situation could undermine President Jacob Zuma's populist appeal and hurt his chances of being re-elected ANC leader in December.

The August 16 shootings, dubbed the "Marikana Massacre" by local media, have hit Zuma's support base, widening the divide between him and his former backers in the ANC Youth League and straining his ties with labor.

In another development Eastern Platinum, a small producer, said its operations near Lonmin's were up and running. The NUM had said earlier that workers there were facing intimidation.

Lonmin has said it may issue new shares to shore up a balance sheet hit by lost output and revenue, and the prospect of further losses - at a time when the whole platinum sector is struggling with soaring power and labor costs and weak demand.

(Additional reporting by Sherilee Lakmidas in Johannesburg; Writing by Ed Stoddard; Editing by Jon Herskovitz and Tim Pearce)

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