Anglo American Platinum Ltd. (Amplats) miners will end an illegal walkout from Wednesday night and want talks to prevent further action against the world’s largest producer of the precious metal, a labour leader said.
Workers at three of Amplats’ South African mines went on a wildcat walkout from Tuesday’s overnight shift, hours after the company, a unit of London-listed Anglo American, announced plans to mothball shafts and cut 14,000 jobs.
“The strike was only for last night,” Amplats labour leader Evans Ramokga told Reuters. He added workers would press management to find a way to head off job cuts, which were equal to about 3 per cent of South Africa’s overall work force in the mining sector. Amplats officials were not immediately available to comment.
Amplats earlier said an unspecified number of employees at its Khomanani, Thembelani and Tumela mines, in the heart of South Africa’s platinum belt, had refused to go underground.
Only Khomanani was among the mines slated for indefinite closure or sale by the company, so the wildcat action indicates militant labour activists had persuaded miners in other shafts to join sympathy strikes.
The protests, which were expected after Anglo American unveiled its restructuring plans, combined with strong government objections to job cuts show how difficult it will be for the mining giant to push through changes critical for its recovery and that of its loss-making unit.
“The restructuring itself was fairly ambitious, it was probably not as much as some people wanted and more than others expected,” analyst Jeff Largey at Macquarie in London said.
“Now it comes down to execution risk and the way things are looking right now, it is going to be more challenging than Anglo thought.”
The mining communities and shantytowns around the platinum belt city of Rustenburg, 120 kilometres northwest of Johannesburg, have been a flashpoint of labour and social unrest.
Amplats’ share price closed nearly 6 per cent lower while Anglo American’s was down almost 3 per cent in late afternoon trade, one of the biggest fallers on Britain’s top share index .
South Africa sits on about 80 per cent of the known reserves of platinum, used to build emissions-capping catalytic converters in automobiles, but weak demand has depressed the price. It rallied to three-month highs on Tuesday because of supply concerns triggered by the Amplats proposals.
The planned job cuts and closures risk provoking a repeat of the violent wildcat strikes in the gold and platinum sectors last year that left more than 50 people dead and slowed the growth of Africa’s largest economy.
They have also stirred anger from the government and ruling African National Congress as they grapple with a jobless rate of more than 25 per cent and growing social discontent ahead of next year’s general elections.
Mines minister Susan Shabangu lashed out at Amplats again on Wednesday, calling the company and its chief executive Chris Griffith “arrogant.”
“Amplats decided to undermine all of us. Amplats continues to be arrogant … They’ve been playing games with us,” she said during an interview with SAFM radio.
Anglo, which says its plan is critical to creating a sustainable platinum business, said in a statement that it took its regulatory and social responsibilities seriously.
Adding to its woes, Kumba Iron Ore, also part of the Anglo stable, said on Wednesday that its full-year profit is likely to have fallen by about a third, hit by lower export prices and an illegal strike at its main mine.
Fuelled by glaring income disparities within the industry and the wider economy, the labour unrest is also rooted in a bloody turf war between the militant newcomer Association of Mineworkers and Construction Union and the dominant National Union of Mineworkers.
A fresh wave of strike action on South Africa’s restive platinum belt and elsewhere could be crippling to an industry battling with soaring wage and power costs and aging mines that are the deepest in the world.
“Everyone expected that when (Amplats) came through there would be some disruption, some protest. It is, though, somewhat surprising to see how far the government in particular has swung in terms of standing with the masses, playing up the popular rhetoric,” Macquarie’s Mr. Largey said.
Strikes would also further erode investor confidence. The South African rand weakened against the dollar and investors pushed bonds lower on Wednesday because of the brewing labour unrest.Report Typo/Error