December 4, 2007 / 6:04 AM / 11 years ago

UPDATE 5-S.African mines strike hits output, platinum rises

(Adds NUM rally ends, government comment, analyst)

By James Macharia

JOHANNESBURG, Dec 4 (Reuters) - Almost a quarter of a million South African miners downed tools on Tuesday in a show of force aimed at breaking a cycle of mounting deaths in mines, disrupting output in the world’s top platinum and gold producer.

The one-day national strike is the first industry-wide strike on safety, launched by the country’s biggest miners’ union in a bid to curb what they call a “genocide” in the nation’s mines, some of which are the deepest in the world.

Thousands of mineworkers, some clad in their mining gear of boots, blue overalls and helmets brought traffic to a standstill in downtown Johannesburg, dancing and marching in protest.

They waved shovels and brandished sticks and placards saying “No More!” and “Mine Safety is a Human Right” as they mourned around 200 colleagues killed in rock-falls and explosions in the mines this year — 199 died last year and 202 in 2005.

“If the big companies do not do anything to improve safety, we will be back on the streets again, we will stop the mines with a two or three months strike,” Lesiba Seshoka, the National Union of Mineworker’s (NUM) spokesman, said at a protest rally.

Thabo Gazi, head of the government’s mine safety watchdog in the Department of Minerals and Energy (DME) backed the strike.

“In the department we have sympathy with their plight. Their speeches touched a nerve, we have to stop the deaths somehow,” Gazi said. “On our part, we have to improve our capacity for mine inspections and prosecutions in cases of negligence.”

Gazi said his unit would this month kick off a safety audit of all the country’s mines as ordered by President Thabo Mbeki.

The DME has vowed to shut all mines when accidents occur, in a hardline stance aimed at forcing mining firms to boost safety.

The strike, which ends at midnight, bit a huge chunk off the mining sector’s output, sending platinum XPT= to a one-week record of $1,460/1,464 an ounce. About 60 companies were affected by the stoppage, the NUM said.

Anglo Platinum (AMSJ.J), the world’s top platinum producer, accounting for 40 percent of world supplies, said the firm would lose 9,000 refined platinum ounces. [ID:nWEB0041]

“DISAPPOINTING SAFETY RECORD”

Second-ranked Impala Platinum (Implats) (IMPJ.J) saw a loss of around 3,500 ounces of platinum, and David Brown, its chief executive officer said his company’s safety record in fiscal year 2007 had been “disappointing”. [ID:WEB0047]

About 900 kg of gold (28,935 ounces) and 590 kg (18,969 ounces) of platinum output could be lost, an analyst said.

The NUM protests ended peacefully, as it demanded in a memorandum to the Chamber of Mines (Com), which represents big mining companies, that it wanted a slew of safety improvements, training of workers on safety, adequate maintenance of mine shafts and the government to prosecute negligent mine managers.

“CEOs must be accountable for every death at their mines,” Zwelinzima Vavi, general secretary of powerful umbrella trade union movement COSATU, told Reuters at the street protest.

Frans Barker, head negotiator for the CoM promised a series of high-level meetings with the NUM to help curb the accidents in South Africa, a key source of vanadium, coal, diamonds, iron ore, chromium, manganese, nickel and uranium.

Analysts said the workers had made their point.

“It’s a concern if the fatalities and mining disruptions continue as companies will not meet their production targets or generate the required return to shareholders,” Coronation Fund Managers’ Cape Town-based investment analyst Duane Cable said.

But new safety measures would raise costs, analysts said.

“Once new safety measures come, there may be less production while costs will go up for the industry as a whole,” said Fidelis Madavo, an analyst at the Public Investment Corporation.

Shares in Anglo American (AGLJ.J), which has platinum, gold and coal interests fell 3.22 percent.

AngloGold Ashanti (ANGJ.J), the country’s top gold producer and the world’s number-three producer, did not produce any gold on Tuesday, and used it to train workers on safety measures.

Gold Fields (GFIJ.J), Harmony Gold (HARJ.J), BHP Billiton BILJ.J and Kumba (KIOJ.J) all saw output disruptions.

(Additional reporting by John Mkhize)

Editing by Chris Johnson

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