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South Africa's Amplats fires 12,000 strikers as unrest deepens
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1 of 4. Striking platinum miners march near the Anglo-American Platinum (AMPLATS) mine near Rustenburg in South Africa's North West Province, October 5, 2012.
Credit: Reuters/Mike Hutchings
By Agnieszka Flak
JOHANNESBURG |
Fri Oct 5, 2012 11:25am EDT
JOHANNESBURG (Reuters) - Anglo American Platinum (Amplats) fired 12,000 wildcat strikers on Friday, a high-stakes attempt by the world's biggest platinum producer to push back at a wave of illegal stoppages sweeping through South Africa's mining sector and beyond.
The rand fell sharply after the announcement, suggesting investors fear the sackings could worsen what is shaping up to be the most damaging period of labor unrest in Africa's biggest economy since the end of apartheid in 1994.
Police shot dead one striking miner overnight, bringing the death toll in two months of unrest to 48. Strikes have spread beyond the mining sector, with Shell declaring on Friday that it would not be able to honor contracts to deliver fuel near Johannesburg because of a trucking strike.
The unrest is causing political trouble for President Jacob Zuma and his ruling African National Congress (ANC), the veteran liberation movement with long-standing ties to labor unions.
"You fire 12,000 people, and it's like 'Oh my god, what happens now?'" one Johannesburg-based currency strategist said.
When rival Impala Platinum fired 17,000 workers in January to squash a union turf war, it led to a six week stoppage in which three people were killed, the company lost 80,000 ounces in output and platinum prices jumped 21 percent.
The police shooting of 34 strikers at Lonmin's Marikana platinum mine on August 16 poisoned labor relations in the sector even more, and the hefty wage deal that ensued triggered copycat demands in gold and iron ore mines.
"Amplats had been giving signals that it was going to hold the line after Lonmin had folded - but it's a huge gamble," said Nic Borain, an independent political analyst.
"Someone had to take it on the chin or this would have kept on unraveling and spread through the economy. It's difficult to know whether this causes the unrest to spread or whether it takes some of the sting out of it. It could go either way."
Speaking to South Africa's e-News television channel, one dismissed worker said Amplats was "starting a war".
ANC UNDER PRESSURE
Zuma tried to put a positive spin on the situation in a speech to business leaders late on Thursday, stressing that since the end of white-minority rule South Africans have shown "the capacity to overcome difficulties when we work together".
"We should not seek to portray ourselves as a nation that is perpetually fighting," he said.
However, with an ANC leadership run-off looming in December, Nelson Mandela's 100-year-old liberation movement is preoccupied with its own divisions. Zuma is seen as unlikely to take any action to stabilize the economy that could upset his political allies in the unions.
"In the build-up to the election, the government is unlikely to come out with any clear policy directives," said Simon Freemantle, an analyst at Standard Bank in Johannesburg.
Reflecting such concerns, Moody's cut South Africa's credit rating last week. Finance Minister Pravi Gordhan has already said he will have to cut his 2.7 percent growth forecast for 2012 when he delivers an interim budget on October 24.
MINER SHOT
More than 75,000 miners, or 15 percent of the workforce in a sector that accounts for 6 percent of output, have been out on unofficial strikes and tensions with security forces and mining bosses were running high even before the mass Amplats sackings.
Near the "platinum belt" city of Rustenburg, 120 km (70 miles) northwest of Johannesburg, workers said a miner was killed by a rubber bullet fired by police overnight.
"He was shot here by the police," Mbubhu Lolo, one Amplats striker told Reuters, pointing to his midriff.
Police would not confirm the cause of the death, although the ground nearby was strewn with spent rubber-bullet shell casings and teargas canisters after clashes the previous night.
On Friday, protesters in a shanty town near the Amplats mine barricaded streets with rocks and burning tyres as more than 30 riot police backed by armored vehicles stood nearby.
Earlier in the week, an Amplats training centre and two conveyor belts were torched, making it harder to restart operations when it does manage to resolve the standoff.
AngloGold Ashanti, South Africa's biggest bullion producer, has lost virtually all local production due to wildcat strikes, while rivals Gold Fields and Harmony Gold have also taken a hit. Around 300 strikers at Kumba Iron Ore have also blockaded the company's giant Sishen iron ore mine in the remote Northern Cape province.
FORCE MAJEURE
Apart from the mining sector, a strike with more potential to damage the wider economy is brewing in transport, with 20,000 truckers on a two-week authorized stoppage to demand higher pay.
Shell said on Friday it could not honor fuel delivery contracts around Johannesburg, declaring "force majeure" to free itself and customers from existing obligations.
"There is fuel available across the country, so the issue is not fuel supply, but the challenge is delivering it safely to our retail sites," the oil major said. Other petrol companies are holding their breath, especially around the commercial hub Johannesburg, but have not yet followed Shell's move.
Raising the stakes, transport union SATAWU said it wanted workers at railways and ports to strike next week, a development that would affect coal and other mineral shipments.
Coal output from one of the world's biggest suppliers has so far been unaffected but any disruption could hit power utility Eskom, which is already struggling to prevent a repeat of a 2008 power crisis when the grid nearly collapsed. Some 85 percent of South Africa's electricity is generated by coal-fired plants.
Many supermarkets and logistics firms are running on back-up plans because of the truckers' strike. U.S. car giant General Motors said production at its Port Elizabeth plant on the south coast had been affected.
(Additional reporting by David Dolan and Wendell Roelf; Writing by Ed Cropley; Editing by Will Waterman and Peter Graff)
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