May 16, 2013 / 12:20 PM / in 5 years

UPDATE 3-Union to strike at S.Africa's Amplats, rand drops

* Tensions rooted in union turf war, income disparities

* Strikes precede tough wage talks

* Rand hits 4-year low

By Helen Nyambura-Mwaura

JOHANNESBURG, May 16 (Reuters) - Miners at South Africa’s Anglo American Platinum will strike from Thursday evening over proposed job cuts, a union official said, driving its shares lower and sending the rand to a four-year low.

“The night shift today is not going underground, and also the day shift tomorrow is not going to work,” said the branch official of the AMCU union, who did not want to be identified. He could not say how long the action might last.

Amplats, an arm of Anglo American and the world’s biggest platinum producer, said last week it would cut 6,000 jobs from its mines near Rustenburg, less than an initial plan to slash 14,000 that had triggered outrage in the government and unions.

Still the Association of Mineworkers and Construction Union (AMCU), whose sudden emergence last year has roiled South Africa’s mining industry, vowed to take action.

Months of violent labour unrest in the mining sector last year, including the police killing of 34 strikers at Lonmin’s Marikana mine, reduced the growth of Africa’s biggest economy and triggered credit rating downgrades.

The prospect of another round of trouble sent the rand down 1.3 percent to 9.3845 per dollar, its lowest since April 2009. Amplats shares fell more than 5 percent to their lowest since late 2005.

With an election looming in a year, the ruling African National Congress (ANC) is worried about the prospect of big job losses. The cabinet is “extremely, extremely concerned” about the latest unrest, environment minister Edna Molewa told reporters at a post-cabinet news conference.

“We are committed to work very hard with the teams in Marikana and throughout the country to bring about stability,” she said. “We are confident that we will be able to cap this problem and nip it in the bud.”

Amplats spokeswoman Mpumi Sithole said the company had received no notification of an intent to strike.


More than 50 people have been killed in more than 12 months of unrest stemming from a vicious turf war between AMCU and the National Union of Mineworkers (NUM).

The unrest is rooted partly in glaring income disparities within the mining industry and the wider society. Patience is wearing thin two decades after the end of white rule as much of the black mine labour force makes only a few hundred dollars a month.

NUM, a close ally of the ANC, had enjoyed a near monopoly in the mining sector but started to lose members two years ago as a belief took hold that its leaders had become too close to management.

NUM says its rival has risen to prominence through violence and promises of unrealistic wage hikes at a time of razor-thin margins in the platinum sector in South Africa, home to 80 percent of known reserves of the metal.

The current wildcat action also comes shortly before a round of wage talks being billed as the toughest since the end of apartheid in 1994.

Workers at Lonmin, the world’s number three platinum producer, ended a two-day wildcat strike on Thursday, sending the company’s shares as much as 3 percent higher.

That stoppage stemmed from the union rivalry, most notably the weekend shooting of an AMCU organiser in a tavern.

“The situation on the ground remains delicate, however, and discussions on workers’ demands continue with unions and other stakeholders,” Lonmin said.

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