Mine closure plans sparks more strikes in South Africa

January 16, 2013

Anglo American Platinum (Amplat) announced plans to close four mine shafts in South Africa’s platinum belt, moves that could result in a loss of as many as 14,000 jobs.

Workers at three of those mines responded by initiating a wildcat strike.

Amplats’ proposals were announced as part of a year-long review of its struggling business and included the sale of its Union mine complex in Limpopo province.

The company said the radical overhaul was needed to deal with lossmaking shafts and turn round a business that has been hit by rising costs and a weak price environment.

However, Amplats has been strongly criticized by the governing African National Congress. South Africa, the continent’s largest economy, is struggling with rampant unemployment and widespread poverty, The Financial Times reported.

South Africa’s mining industry is still reeling from the waves of labor unrest that resulted in the death of about 50 people and waves of wildcat strikes costing the sector billions of dollars.

Amplats said a group of its employees at three mines in the Rustenburg area – Khomanani, Thembelani and Tumela – refused to go underground following the announcement and were engaged in an illegal work stoppage.

“Management is currently engaging with the employees to encourage them to proceed underground. Operations at other Rustenburg and the north of Pilanesburg mines are normal,” Amplats said in an email to The Financial Times.

The latest unrest could be just the beginning of the battle facing Amplats as it seeks to implement its plans.

Susan Shabangu, South Africa’s mineral resources minister expressed “grave disappointment” about the decision. She said her department had not been properly consulted and added that it would subject the entire portfolio of Anglo American to “regulatory scrutiny to ensure compliance to prescripts."

The ANC also lambasted the company, describing its decisions as “cynical and dangerous in the extreme”, adding that it was “part of a strategy to divest its business from South Africa and relegate the mines in South Africa to ‘dogs.'"

“This action by Amplats convinces us that a move to have all the mining licenses reviewed is not misguided,” the ANC said.

Chris Griffith, Amplats chief executive, said that it was important for workers to understand the restructuring was not in “reprisal” for last year’s wildcat strikes but the results of a review that began at the start of 2012.

“The company has to take these drastic and significant actions to save the company and the employment of an additional 45,000 people,” Griffith said.

He told The Financial Times that the company was “clearly ... going to need government support”.



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