CAPE TOWN, Oct 25 (Reuters) - Strikes hitting South Africa’s platinum and gold mines have cost the continent’s largest economy just over 10 billion rand ($1.14 billion) so far this year, the National Treasury said on Thursday.
Output from the world’s top platinum and major gold producer has been curtailed by months of labour unrest that have hit the sector responsible for about 6 percent of gross domestic product, raising concerns about growth prospects.
“Declining mining output and the spread of strike activity has depressed activity in related industries including manufacturing, logistics and services, with negative consequences for GDP,” the Treasury said in its interim budget policy statement.
In the year to August, mining output fell by 3.3 percent, with production of platinum group metals 15.3 percent lower, although strong iron ore demand from China has helped offset some of the decline in the platinum, gold and coal sectors, it added.
Finance Minister Pravin Gordhan, who marginally cut the country’s GDP forecast for the year to 2.5 percent from the 2.7 percent forecast in February, said it would take government some time to determine the full impact of the mining strife on growth.
“We will take that knock, recover from it and move on because life doesn’t end now or next week. Life moves on,” Gordhan said during a press conference ahead of delivering his three-year budget policy statement in parliament.
About 100,000 workers have downed tools for better pay since August in a wave of strikes that has sparked two credit downgrades and prompted questions about the relatively slow response of President Jacob Zuma’s government.
Most of the strikes have been settled, either with pay raises well above inflation or with employers sacking - or threatening to sack - workers who walked out on wildcat strikes.
In the worst of the unrest, police shot dead 34 striking platinum miners at Lonmin’s Marikana mine on Aug. 16, in the bloodiest security incident since the end of apartheid in 1994.