More labor unrest in South Africa

March 13, 2013

The same kind of labor unrest that has plagued the South African mining sector could be restarting as workers at a coal mine operated by Anglo American began a wildcat strike on March 12.

The Financial Times reported that miners at the Kleinkopje Mine began a wildcat strike in the morning, halting production over internal issues “specific” to the mine, a spokesman said. 

Anglo American said production had resumed at the mine, adding that the strike was “resolved by late afternoon” and that the night shift had not been affected. However, this strike follows wildcat strikes at five mines operated by Exxaro, one of South Africa’s largest diversified mining groups, and will raise concerns that unrest could be escalating in the coal sector.

Previous labor unrest in South Africa was primarily in the gold and platinum sectors.

The industrial unrest cost companies billions of rand in lost production and dented South Africa’s growth for the year. More than 50 people were killed in strike-related violence, including 34 protesters shot by police in August.

The climate across the industry remains tense and volatile with gold, platinum and coal mining companies due to begin two yearly wage negotiations in the summer, The Financial Times reported. Workers are demanding higher salaries and improved conditions.
Earlier this year Anglo American Platinum announced restructuring plans with plans to close two mines and possibly cutting as many as 14,000 jobs.

The unrest in the platinum sector has been exacerbated by the emergence of the Association of Mineworkers and Construction Union (Amcu) which is challenging the 30-year dominance of the National Union of Mineworkers. Amcu has already made strong inroads in the platinum sector and has also been recruiting in the gold sector, but it is not thought to have a big presence in coal, which is less labor intensive.

The situation has been further complicated by workers seeking to represent themselves as they become dissatisfied with traditional unions, which they feel have failed to do enough to tackle widespread poverty and gaping inequality in Africa’s largest economy.

The Exxaro strikes began at two mines, before spreading to three other mines, with miners protesting over a range of issues, including the non-payment of bonuses and other grievances.

Mining executives operating in South Africa have warned that increased unrest and additional cost burdens could lead to the closure of marginal shafts, particularly in platinum, and further job losses as companies complain of spiralling costs. The strikes have severely damaged South Africa’s image as an investment destination at a time when Africa is enjoying increased investor attention.


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