South Africa: Strikes Spreading Manufacturing Sector Now Affected

Filed under: Business,Featured |
South African miners evicted photo

South Africa’s mining strikes are spreading daily

South Africa’s economy continues to be tormented, as strikes spread to other sectors – Kumba Iron Ore and Toyota being the latest victims of illegal strikes.

Unrest in the gold mining industry also continues, as Gold One International Ltd. and Harmony Gold Mining Co. become the next producers in the long line of those halting production due to striking labour forces.

Kumba Iron Ore – a unit of mining giant Anglo American – stopped production on Wednesday, after an estimated 300 workers at the company’s Sishen mine in the Northern Cape of South Africa downed tools and walked off shift.  Kumba is one of the world’s top 10 iron-ore producers, with the Sishen mine representing the biggest iron-ore operation in Africa.

While the company did confirm on Wednesday that the strike was limited to approximately 300 workers from one production area, on Thursday Kumba was forced to halt all operations as strikers blocked access to the mine for those that did report for duty.

In response to Thursday’s announcement, Kumba share prices took an immediate free-fall of more than 4 per cent.

Also on Thursday, South Africa’s economy saw another unwanted development, as the country’s Durban-based Toyota manufacturing unit confirmed that production had stopped for four days, as workers continued on strike in demands for pay package increases.   The company’s Durban operations produce an estimated 120,000 automobiles a year.

Fortunately, in this situation the Japanese car producer was also able to announce that the striking labour force was expected back in work on Friday, following a relatively swift resolution to the strike as the employer offered a 5.4 percent pay rise to workers.

No sector appears to be safe from the unrest, as 20,000 truck drivers continue a legal strike in calls for higher wages.  Despite an offer of an 18 percent increase over two years being put on the table, truck drivers’ unions rejected the offer and opted to push for further increases, disclosed the Road Freight Employer’s Association.

In the gold and platinum mining world, prolonged striking and new outbreaks continue to plague the sector.

Since September 10th, GoldFields has been struggling to contain a striking work force, first causing output to be halting at the company’s KDC mine, followed by a closure at its Beatrix mine some two weeks later as unrest spread across the world’s fourth largest bullion producer.

AngloGold Ashanti reported a downing of tools at its Kopanang mine on September 21st, shortly after which the gold producer had to shut down all of its South African operations as trouble spread.

Anglo American Platinum (Amplats) has also been badly hit, with the platinum producer closing down its four mines at Rustenburg on September 12th as striking miners displayed ever-more rowdy tendencies, attacking those who did report for duty – despite the producer reporting that those reporting accounted for less than 20 percent of the 21,000 work force.

Most recently, then, Gold One International had to close down operations as strikes began on Monday at the producer’s Ezulwini mines, 40 kilometres to the south-west of Johannesburg.  Workers at Gold One are reportedly demanding more an increase of more than four times the inflation rate.

Another company affected this week is Harmony Gold Mining Co, who found entrances to its Kusasalethu operation blocked with burning tyres, as part of a pay-hike oriented strike launched by over 5,400 employees.  Share prices in Harmony Gold fell straight away on the Johannesburg Stock Exchange, dropping by 1.5 percent.

The unrest in the South African mining sector – and now its manufacturing sector – was sparke by initial strikes at platinum producer Lonmin’s Marikana mines earlier in September.  Following six weeks of rioting and violence – causing the deaths of over 40 people – Lonmin agreed a wage package increase of between 11 and 22 percent, prompting a resolution of the prolonged stand-off.  However, following the agreements, employees across the South African work force started to launch similar strikes, with a view to securing an across the board pay increase comparable to that awarded by Lonmin.

President Jacob Zuma has come under significant criticism for not doing more to ensure that employers pay their employees a livable wage, which is the only way to instill stability across the economy. The current stoppages have cost the country billions of Rand in revenue.

 

By; Gabriella Mulligan