Investors warned that rolling strikes in South Africa could reduce investment in the continent’s largest economy Wednesday, as industrial action continued to spread across sectors.
With coal miners, truck drivers and yet more gold miners becoming the latest groups to down tools, concern is growing about the long-term impact on South Africa’s economy.
Investors warned that a failure to solve the impasse would have a severe impact on the mining sector in particular, which accounts for a fifth of the country’s GDP.
“I don’t think it has done damage yet, but I think if it is not knocked on the head in the short term, it can have considerable negative effects on the long-term innovation climate in South Africa,” said Cobus Venter, director of investment consulting firm Econex.
The illegal action combined with “uncertainties about the future of labour law in South Africa, compounded with the impact of uncertainty on mineral rights in South Africa is quite a toxic combination,” he told AFP.
With 24,000 miners on strike at Gold Fields Ltd. mines, around 20,000 at Anglo American Platinum and at least 17,500 at AngloGold Ashanti Ltd., firms have seen production slashed, while being left with weakened union interlocutors.
“The trouble is we don’t know when it’s going to end. This year it’s 16,000 (strikers), next year it’s 20,000, then 30,000,” said an analyst from a mining firm who requested anonymity because of the sensitive nature of the topic.
“There doesn’t seem to be any sort of control,” he added. “It looks like these guys are not listening to the unions any more.”
Strikes for higher wages spread from platinum to gold, chrome and coal industries after workers downed tools at the Lonmin PLC platinum mine on Aug. 10.
Management agreed to up to 22-per-cent wage hikes after 46 people died – including 34 shot dead by police in one day – at the mine after weeks of violence.
Now workers at other mines are demanding similar increases.
Anglo American Platinum on Wednesday confirmed it had lost around 20,000 ounces of production, with a market value of more than $35-million (U.S.), since wildcat strikes started at its Rustenburg operations northwest of Johannesburg.
Strikes at world No. 4 producer Gold Fields, meanwhile, turned violent overnight, said spokesman Willie Jacobsz.
“In the past 24 hours there has been an escalation of intimidation, threats against non-strikers,” he told AFP.Report Typo/Error