South African strikes spread to iron ore
Comment of the Day

October 04 2012

Commentary by David Fuller

South African strikes spread to iron ore

My thanks to a subscriber for this informative article by Andrew England for the Financial Times (will require subscription registration, PDF also provided). Here is the opening:
Two fresh wildcat strikes have broken out in South Africa's beleaguered mining sector as the industry's worst crisis since the end of apartheid in 1994 continued to escalate.

Kumba Iron Ore, a subsidiary of Anglo American, said 300 workers at its Sishen mine - South Africa's biggest iron ore mine - downed tools on Tuesday night. It is the first industrial action to affect iron ore since the unrest began in the country's rich platinum belt in August at mines operated by Lonmin. Anglo said work at the mine had not been halted with the strike action contained to one area of its operations.

Harmony Gold, which had previously been unaffected by the industrial action, also said workers at its Kusasalethu mine had embarked on a wildcat strike. The mine accounts for about 14 per cent of the group's total production and is in the Carletonville area where thousands of miners employed by other gold companies are already on strike.

It is estimated that more than 75,000 miners are now on strike, with the industrial action affecting major companies including Gold Fields, Anglo American Platinum and AngloGold Ashanti, which has been forced to halt its entire South African operations.

Kumba said its striking miners were not represented by recognised unions, replicating a trend across the industry where workers appear to be increasingly dissatisfied with their traditional unions and are instead presenting demands through workers' representatives. This has complicated efforts to resolve disputes as workers' have become more militant.

David Fuller's view Needless to say, these strikes remains a serious problem for South Africa's economy and they are also challenging the ANC's ability to govern this sector of the economy.

They are also an additional tailwind behind the rally in precious metals.

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