SOUTH Africa cannot afford more labour unrest in the platinum industry, finance minister Pravin Gordhan said yesterday, after the Association of Mineworkers and Construction Union (Amcu) said it would launch a strike at the world’s top three producers this week.
Amcu members voted overwhelmingly on Sunday to strike at the world’s biggest producer, Anglo American Platinum. That followed recent votes to strike at Impala Platinum and Lonmin.
A simultaneous stoppage at the three will hit an important export at a time when the rand is near a five-year low, and further dent investor confidence in the economy.
Amcu said yesterday it will send strike notices to gold companies later in the day, following its recent decision to strike at the country’s top three platinum producers.
“We will send notices to gold as well today,” Amcu spokesperson Jimmy Gama told Reuters.
“The platinum industry needs to seriously get around the table,” Gordhan said on state broadcaster SAFM in an interview.
“We can least afford another round of strikes that will act as a destabilisation to the platinum sector, which has had increasing difficulties over the last 18 months.”
The rand was largely steady against the dollar in early Monday trade, but pressure on the currency is likely to rise as the platinum mining sector braces for more strikes.
The unit turned slightly weaker after Gordhan’s comments, and was trading at R10,8800 early yesterday morning after ending Friday’s session in New York at R10,8700.
Signs of slowing growth in China, a key consumer of South African commodities, could also weigh on the local currency.
“Profit-taking and mounting local rate hike expectations help to explain why the rand has enjoyed some reprieve in more recent days,” Absa Capital said in a market note.
“But given this morning’s data out of China, which offered more evidence that South Africa’s largest trading partner is slowing, … an extended rand recovery could prove difficult to achieve, especially ahead of this week’s looming strike.”
A series of strikes in the manufacturing and mining sector dented investor appetite for South African assets last year, helping slash about 25% off the rand’s value against the greenback.
Renewed labour unrest will also be an unwelcome distraction for President Jacob Zuma and his ruling African National Congress ahead of general elections expected in three months.
At Amplats and Lonmin, the union is seeking a minimum monthly wage of R12 500 for entry-level workers — more than double current levels, under the populist banner of a “living wage”.
At Impala, the union scaled back its demand late last year to just over R8 500 a month.
Companies have said they can ill afford steep increases as power and other costs soar, while prices for the white metal used in emissions-capping catalytic converters in automobiles remain depressed.
Platinum’s spot price shed 11% last year and is about 40% down from record peaks scaled in 2008.