Minining minister says state should increase its role

October 23, 2012

Susan Shabangu, South Africa’s Minister of Natural Resources, said that the state-owned mining company should play a bigger role as the country gets to grips with a wave of strikes that have crippled the industry.

Shabangu’s call for greater state involvement in the mining sector, which comes as thousands of miners strike for better wages, underscores how economic and political problems caused by the strikes threaten to reshape the industry in the long term, The Wall Street Journal reported.

A series of strikes that began at the nation’s platinum mines has all but paralyzed the mining sector and has resulted in some of the country’s worst cases of violence since the apartheid era. The mining sector has also lost thousands of ounces of gold and platinum production. The unrest has hammered the country’s currency and prompted ratings firms Moody’s Investors Service and Standard & Poor’s Ratings Services to cut its debt rating.

Shabangu said South Africa’s state mining company African Exploration Mining and Finance Corp. is still in its infancy, but it will grow and have a greater presence, though it won’t replace private mining companies.

“In light of what’s going on, it needs to take a much more prominent role,” she told Dow Jones on the sidelines of a South Africa-Congo bilateral meeting.

“It’s also important for us to reflect on the future and the empowerment of workers,” she said. “We cannot continue to be stuck in systems of the past.”

ANC spokesman, Jackson Mthembu, said this month that full-scale nationalization isn't an option that will be considered in December.
Mining companies have started to dismiss workers striking illegally, as wage talks have failed to resolve the disputes.

Recently, Anglo American Platinum Ltd. fired 12,000 workers and Gold Fields Ltd. dismissed 1,500 employees after a wildcat strike shut mining operations for weeks.

Workers at Harmony Gold and AngloGold Ashanti Ltd. also face dismissal if they don't return to work in the coming days.

“Mass dismissals will have a negative impact on the country. We really urge mining companies to review and look at that decision,” Shabangu said. “The strikes in general are bad for our economy and we cannot afford them, but we also cannot afford to add to our unemployment,” she said.

Strikes have spilled beyond the mining sector. On Oct. 23, the National Union of Metalworkers of South Africa said that workers at a factory run by the South African branch of Goodyear Tire went on strike over a pay dispute. That follows a strike earlier in the month at a plant owned by Toyota Motor Corp. and one by 40,000 truck drivers in the country, both which ended earlier this month.



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