CAPE TOWN (Reuters) - South African President Jacob Zuma vowed on Wednesday to take a hard line against labor unrest in the mining sector, which has been rocked by 18 months of killings and wildcat strikes that have threatened to destabilize Africa’s biggest economy.
Zuma’s decisive comments helped lift the rand about 8 cents to 9.94 per dollar, a stark contrast to last month, when the currency sank to four-year lows after he held a news conference to try and stem its slide.
“Our law enforcement agencies have been instructed not to tolerate those who commit crime in the name of labor relations. They will face the full might of the law,” he told parliament.
He also said his government would remain impartial in a turf war between the upstart Association of Mineworkers and Construction Union (AMCU) and the National Union of Mineworkers, a long-standing ally of the ruling ANC.
“Government does not take sides and does not favor any labor union over others in the mining industry. Our interest is in finding solutions,” he said.
Zuma’s deputy, Kgalema Motlanthe, a former Secretary General of NUM who has been nominated as the government’s point man on the mining crisis, is due to meet unions, mining bosses and government departments on Friday to try and ease tensions.
The government was heavily criticized for its handling of last year’s mining unrest in which more than 50 people died. The turbulence also cost billions of dollars in lost output and led to sovereign credit downgrades.
Platinum producer Lonmin was in last-ditch talks on Wednesday over a recognition agreement with AMCU to avert a strike at its mines, which are only found in South Africa.
Wage negotiations are about to kick off across the industry and are expected to be among the toughest ever as rising worker militancy clashes with shrinking company margins and falling commodity prices.
“It is not in the interest of the country to have a tense labor relations environment which is characterized by a weakening of collective bargaining mechanisms, illegal wildcat strikes, violent protests and loss of life,” Zuma said.
He also said “we must not move away from the collective bargaining system”.
AMCU may take that as a swipe, because it has made most of its inroads on the platinum belt, where wage talks are done on a company-by-company basis instead of collectively.
South Africa sits on about 80 percent of the world’s known reserves of platinum, a trillion dollar resource, and is also a major producer of gold and coal.
South Africa’s economy was built on mining and while it now only accounts for about 6 percent of GDP, it punches way above its weight by bringing in around half of export earnings and acting as a major employer in a country with a jobless rate of over 25 percent.
Writing by Ed Stoddard; Editing by Ed Cropley and Jeff Coelho