Labor Unrest Spreads Throughout South African Mining Industry

Filed under: Business |
South African miners2 photo

SA Miners down tool to demand a livable wage

The labor unrest that has crippled the South African gold and platinum mining industry continues to spread, extending to a second operation of Gold Fields LTD (GFI) KDC on Tuesday.

The country’s second-largest gold producer said that the strike at the west section of its KDC Gold Mine on the West Rand continues and that workers from its Beatrix Mine in the Free State also walked off the job on Sept. 21 with demands of higher wages.

It is the latest in a series of industrial strikes that have swept through the country’s mining sector since 3,000 rock drillers at platinum producer Lonmin PLC (LMI.LN) stopped work at the mine Aug. 10 with demands of higher wages.

The strike, which left 46 people dead in clashes between employees and police, has since spread to other major gold and platinum mines.

Lonmin settled its strike with an 11 to 22 percent pay raise, but miners at four of Anglo American Platinum Ltd. (AMS.JO) platinum works continue to strike for higher wages, while 5,000 other workers ceased work at AngloGold Ashanti Ltd.’s (ANG.JO) Kopanang mine last week.

The strikes are destabilizing the sector, which employs some 300,000 people, and putting pressure on companies that say they are already struggling with rising inflation for both labor and energy costs.

Miners aren’t the lowest paid in the country, but entry-level wages average between 5,000 rand a month and 6,000 rand a month, according to the country’s union federation, Cosatu.

Lonmin lost more than 60,000 troy ounces of platinum output due to its strike, while Gold Fields estimated that it will have lost about 20,000 ounces of gold production by the close of Tuesday.

At the heart of the strikes is worker dissatisfaction with the slow pace of change since the end of apartheid and frustration with union leadership, particularly within the National Union of Mineworkers. At Gold Fields’ KDC mine, workers are demanding leadership changes within the NUM. So far, the NUM hasn’t been able to broker a deal to end the strike.

Both Gold Fields and Anglo Platinum have the right to dismiss workers because the strike wasn’t sanctioned within the country’s labor laws. Anglo Platinum started meetings with workers Tuesday using the state labor mediator, but Gold Fields says it continues “explore all options.”