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S. Africa labour strife spreads to AngloGold

Miners return to work at the Lonmin platinum mine after Lonmin resolved a five-week strike by agreeing to pay raises of up to 22 per cent, in Marikana, Rustenburg, South Africa, Sept. 20, 2012.


The industrial strife hitting South Africa's mining industry has spread to AngloGold Ashanti, the world's third-largest bullion producer by sales, after 5,000 workers went on strike at one of its mines.

The wildcat strike at AngloGold's Kopanang mine began on Thursday evening amid mounting concerns that a wage settlement agreed by Lonmin, the platinum miner, to end a nearly six-week illegal strike at its operations would set a dangerous precedent for the industry.

Lonmin, the London-listed company, agreed on Tuesday to give its miners salary increases ranging between 11 per cent and 22 per cent to halt its strike, which had triggered the worst outbreak of violence in South Africa since the end of apartheid in 1994. That unrest, which had forced Lonmin to halt its South Africa operations, was marred by intimidation and violence in which 45 people died, including 34 miners shot by police last month.

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Lonmin resumed operations on Thursday, when about 80 per cent of its 28,000 employees returned to work. The settlement will add about 14 per cent to its wage bill.

Alan Fine, of AngloGold, said it was not clear what the workers' demands were at the Kopanang mine.

But Lesiba Seshoka, a spokesman for the National Union of Mineworkers, said the miners were demanding R12,500 ($1,500 U.S.) a month – the original demand of the Lonmin strikers.

"It looks like this is just a contagious thing," Mr Seshoka said. "Our greatest worry is that if you are going to have sporadic demands throughout the industry, then it will undermine collective bargaining and that's going to be chaos."

Kopanang mine produced 90,000 ounces of gold in the first half of the year, about 4 per cent of the company's overall production during that period.

The industrial strife had already spread to Gold Fields, where 15,000 workers have been on strike for nearly two weeks, and Anglo American Platinum, the world's biggest platinum producer.

On Thursday, Amplats said less than 20 per cent of some 26,000 workers at five mines in Rustenburg had returned to work on Friday after it lifted a suspension on the shafts' operations earlier in the week.

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Amplats has threatened to pursue "legal avenues" against those who remain absent.

The unrest has led to mounting concerns that traditional labour mechanisms used to resolve disputes between workers and employers are breaking down.

When the strikes began in the platinum sector, industry officials said it was less likely to spread to gold because gold companies use collective bargaining to negotiate with unions. In contrast, platinum companies have negotiated on a company-by-company basis.

They also pointed out that that the Association of Mineworkers and Construction Union – a militant, upstart union that has made strong inroads among platinum workers – had a much weaker presence in gold mining, where the NUM dominates.

But the unrest has shown workers becoming increasingly frustrated with their union representatives and taking unilateral action that exacerbates tensions and complicates negotiations. Their demands also appear to become more militant, with concerns that the wildcat strike at Lonmin and the high level salary increases in the wage agreement will lead to greater demands.

Jacob Zuma, South Africa's president, said on Monday that the value of lost production in the gold and platinum sectors due to work stoppages during the past nine months was close to R4.5bn ($530-million), while the indirect impact of strike actions had cost the Treasury R3.1bn.

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