A series of sometimes violent strikes in the factory and mining
sectors constrained growth to a sluggish 2 percent in 2013,
hampering efforts by President Jacob Zuma's government to create
badly needed jobs as it braces for elections this year.
The African National Congress has swept elections since overturning
white minority rule in 1994, but the party Zuma now heads faces
growing criticism that it has failed to lift millions of blacks out
of poverty during 20 years in power.
Platinum producers Anglo American Platinum <AMSJ.J>, Lonmin <LMI.L>
<LONJ.J> and Impala Platinum <IMPJ.J> said they had received notice
from the Association of Mineworkers and Construction Union (AMCU) to
strike in 48 hours, setting the stage for another crippling wave of
The chamber of mines, which represents bullion producers, said it
was seeking a court order to block plans by the AMCU to down tools
at Sibanye Gold's <SGLJ.J> Driefontein mine, Harmony Gold's <HARJ.J>
Kusaselethu and Masimong mines, and at AngloGold Ashanti's <AGLJ.J>
The AMCU, which has a record of militancy, has rejected a 8 percent
pay hike that rival union National Union of Mineworkers (NUM), which
still represents most gold miners, agreed with producers last year.
The rand hovered close to recent five year lows after news of the
planned strikes and Gordhan's warning, with scope to extend its
nearly 4 percent losses against the dollar in the first three weeks
of the new year.
Renewed labor strife in Africa's biggest economy will raise a red
flag for ratings agencies after more than 50 people died during
violent mine protests in 2012 that triggered downgrades from
Moody's, Fitch, and Standard and Poor's and helped knock about 25
percent off the rand's value.
"The platinum industry needs to seriously get around the table,"
Gordhan told state broadcaster SAFM in an interview on Monday. "We
can least afford another round of strikes that will act as a
destabilization to the platinum sector, which has had increasing
difficulties over the last 18 months."
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STRIKES CONSTRAIN SOUTH AFRICA RATING
Earlier this month, Moody's cited weakening productivity and
strike-related business losses, exacerbated by declining terms of
trade, as a major credit challenge for South Africa.
"The economy has never fully recovered its momentum following the
global recession in 2009, partly due to domestic political and
economic turbulence ignited by violent labor unrest and the
associated uncertainty that it has created," it said.
Demands for wage increases well above inflation of 5.3 percent will
also worry the Reserve Bank, which has been blocked from further
policy loosening by price pressures stemming from the rand's
The central bank will likely keep interest rates at a four-decade
low of 5 percent at its first policy meeting of the year next week.
At Anglo American Platinum and Lonmin, the AMCU is seeking a minimum
monthly wage of 12,500 rand ($1,200) for entry-level workers — more
than double current levels, under the populist banner of a "living
At Impala, the union scaled back its demand late last year to just
over 8,500 rand a month.
The NUM said on Friday it had accepted overall wage increase offers
of between 9.8 and 11.8 percent from mid-tier platinum producer
Northam Platinum <NHMJ.J> in a bid to end a 75-day strike by more
than 7,000 miners.
Companies have said they can ill afford steep increases as power and
other costs soar while prices for platinum, used in
pollution-reducing automobile catalytic converters, remain
($1 = 10.8370 South African rand)
(Writing and additional reporting by
Stella Mapenzauswa; additional reporting by Ed Stoddard; editing by
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