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S. Africa Won’t Allow Mine Anarchy in Pay Talks, Shabangu Says

South Africa’s government won’t tolerate anarchy or wildcat strikes at the country’s mines as annual wage negotiations in the industry get underway, Mineral Resources Minister Susan Shabangu said.

Shabangu and Finance Minister Pravin Gordhan agreed on an action plan with mining executives after a May 24 meeting as part of efforts to “restore calm and confidence” in the industry, she told lawmakers in parliament in Cape Town today. A progress report from the group is due within a month, she said.

Africa’s largest economy has come under strain after a series of mining strikes last year caused more than 10 billion rand ($1.04 billion) in lost output and shaved about 0.5 percentage point off gross domestic product, according to the National Treasury. GDP growth slowed to an annualized 0.9 percent in the fiscal first quarter from 2.1 percent in the fourth, Statistics South Africa said today. The median estimate of 15 economists in a Bloomberg survey was 1.6 percent.

Mine wage negotiation participants should “be more responsible and take decisions that will retain jobs, bring about stability of this sector and ultimately help our economy as it emerges from the ravages of the recent economic downturn,” Shabangu said.

Union rivalry has contributed to the deaths of at least 46 workers. The previously dominant National Union of Mineworkers has lost members to the Association of Mineworkers and Construction Union, which now speaks for more employees at the world’s three largest platinum producers -- Anglo American Platinum Ltd. (AMS), Impala Platinum Ltd. and Lonmin Plc. (LMI)

Attractive Outlook

Newly formed mining unions “supported by the ultra-leftist groupings” display growing “anarchy,” Zweli Mkhize, Treasurer-General of the ruling African National Congress, said May 23 at a NUM conference.

Shabangu, who said the outlook for the South African mining industry is “extremely attractive,” called for its modernization, including an end to migrant labor models that have lingered since the end of the apartheid system of racial segregation in 1994 and involve workers taking jobs far from their home towns and regions.

“This system results in mineworkers leading multiple families, which they struggle to sustain,” Shabangu said. Mining companies should develop a 10-year strategy to make the practice obsolete, she said. This would enhance the competitiveness of South African mines and improve the working and living conditions of miners.

To contact the reporter on this story: Mike Cohen in Cape Town at mcohen21@bloomberg.net

To contact the editors responsible for this story: John Viljoen at jviljoen@bloomberg.net; Nasreen Seria at nseria@bloomberg.net

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