News Column

Rand hits the skids

January 24, 2014

THE already fragile rand was on the ropes yesterday, touching R11 to the US dollar, as miners in the platinum industry went on strike and analysts said the government appeared to have lost control of the labour movement. This latest wave of labour unrest knocked the currency to a new five-year low, causing investors to fret about the impact of the strikes on an economy already taking strain. Hard-hit consumers are likely to feel the squeeze as prices of all imported goods - including petrol and diesel - could be affected. South Africa's mines produce half the world's platinum. The main union, the Association of Mineworkers and Construction Union , began a strike for hefty wage hikes their employers say they cannot pay. The chief executives of Anglo American Platinum , Impala Platinum and Lonmin , the top three producers of the metal used in catalytic converters in cars, have said the wage demands are "unaffordable and unrealistic", and warned that the industry could ill afford further production and job losses. Amplats chief executive Chris Griffith , Implats chief executive Terence Goodlace and Lonmin chief executive Ben Magara repeated that a prolonged strike would probably further damage South Africa's reputation as an attractive business and investment destination. It would also have "a negative impact on the revenue flows and sustainability of the platinum operations, and job losses at a number of marginal mines and shafts". "Striking is not a constructive solution if we are to return the company to a sustainable financial footing and secure existing jobs," said Griffith. The companies have indicated that they were willing to engage with Amcu, and the union said it had received a mandate from its members to participate in the talks. Negotiations are set to start today at the Commission for Conciliation , Mediation and Arbitration in Joburg. The government, led by Deputy President Kgalema Motlanthe, has also offered to mediate in an attempt to end the dispute. Besides economic damage, President Jacob Zuma and the ANC want to end labour unrest before the elections due in about three months. But the government has been unable to ease tension in the platinum belt, where miners are angry about their lack of economic progress. "There is no concrete government action to prevent the kind of rolling strikes that we are seeing now for 11 months of the year," labour economist Loane Sharp said. "I think the government has lost control of the labour movement in South Africa ." Labour Department spokesman Musa Zondi compared the importance of ending the strike to breathing, with the economy not able to take another hit. However, workers also had real grievances that needed to be addressed, and the talks were "a balancing act". "The reality is that the country can't take another prolonged strike, so it is with that in mind that the minister is anxious to get the parties together so we can find a middle ground," he said. "In the end, workers lose out. Whatever they eventually get, gets cancelled by… whatever they lost when they were on strike. The economy needs to keep jobs and be stable." But Amcu president Joseph Mathunjwa said the government would not force the union's hand or direct its stance on the talks. "The government will not make decisions for us. If they are taking sides, we will show them the door," he said. The Mercury


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Source: Mercury, The (South Africa)


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