February 4, 2013 / 5:19 PM / in 6 years

S.Africa's Zuma equates mine closure plans with "blackmail"

South African President Jacob Zuma listens as Swedish Prime Minister Fredrik Reinfeldt addresses a news conference after their meeting in Cape Town, September 10, 2009. REUTERS/Mike Hutchings

CAPE TOWN (Reuters) - South African President Jacob Zuma said on Monday that mining companies were almost engaging in “blackmail” when they announce plans to close mines and lay off workers.

Zuma’s pre-recorded comments broadcast on CNBC Africa come as the government, unions and ruling African National Congress have come out strongly against proposals by Anglo American Platinum (Amplats) to mothball two mines and lay off 14,000 workers as it strives to return to profit.

“When the miners say we are cutting down, we are closing ... You see, that is almost blackmail,” Zuma said.

Zuma also said “lower wages in the mining industry has led us into trouble.”

South Africa’s platinum and gold sectors were rocked last year by violent strikes and labor violence that killed over 50 people and hit output.

Amplats, the world’s top platinum producer, said on Monday it had made its first annual loss last year because of the strikes and warned of growing labor unrest.

Zuma’s remarks coincide with an investor conference on mining in Africa being held this week in Cape Town.

Separately, Mines Minister Susan Shabangu told the conference proposals by the ruling ANC to introduce a “resource tax” would be carried out with an intent to keep South Africa competitive among other major mining countries.

“We’ve got to compete with Australia and Canada. So if there are any taxes which must be implemented we must be mindful,” she said.

Reporting by Ed Stoddard; Editing by David Cowell

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