Zuma: Miners Need Better Living Conditions Amid Strike

South African President Jacob Zuma called on mining companies to do more to improve the living conditions of workers to help bring stability to an industry that’s in turmoil amid a 20-week platinum strike.

Labor relations in the country are “untenable” and the government will take a more proactive role in resolving tensions, Zuma, 72, said in his state-of-the-nation speech in Parliament in Cape Town. The state will help revitalize mining towns while ensuring companies met their obligations to improve housing for workers, he said.

Zuma, who took office for a second five-year term in May, is seeking to bolster confidence in an economy threatened by recession after a strike by more than 70,000 workers shut the world’s biggest platinum mines. Standard and Poor’s cut the nation’s credit rating to one level above junk status on June 13, concerned that a slowdown in growth will make it difficult for the government to stick to its budget targets.

“Zuma presented an ambitious outline for his next term of office but many of the initiatives and promises have been retreaded from previous addresses,” Daniel Silke, director of Cape Town-based Political Futures Consultancy, said by phone. “The speech really did not indicate that the president was willing to take any major political risk to kickstart crucial aspects of the South African economy.”

Jobless Rate

Zuma’s speech was his first public appearance in more than a week following a two-day stay in the hospital after suffering from exhaustion. He was driven to the front entrance of the National Assembly and took the hand of the Speaker Baleka Mbete as he descended the steps into the speaking chamber.

Economic policy in Zuma’s second-term administration is focused on implementing a 20-year National Development Plan that seeks to cut the jobless rate to 14 percent by 2020 from 25 percent. The government is targeting a growth rate of 5 percent by 2019, Zuma said.

“The economy takes center stage in this program,” he said. “It remains our strong belief that the most effective weapon in the campaign against poverty, is the creation of decent work, and that creating work requires faster economic growth.”

The central bank last month cut its growth forecast for this year to 2.1 percent from 2.6 percent.

Zuma pledged to improve the investment climate and address power shortages that have caused rolling blackouts since last week. Measures will include speeding up the provision of funding for a third new coal-fired power station and the development of new nuclear energy plants.

Power Shortage

Eskom Holdings SOC Ltd., the state-owned power utility that’s facing a 191 billion-rand funding shortfall to finance projects to boost electricity supply, will receive the support it needs to fulfill its mandate, Zuma said.

“We are determined to work with the private sector to remove obstacles to investment,” Zuma said. “The low level of investments is a key constraint to economic growth. We would like to see the private sector showing as much confidence in the economy as the public sector.”

Sixty-one percent of 3,370 adults surveyed in February and March said the state wasn’t doing enough to address unemployment, research company Ipsos said in a June 13 e-mail. Just 12 percent said they got value for money from the taxes they paid, it said.

While the strike that shut shafts owned by Anglo American Platinum Ltd. (AMS), Impala Platinum Holdings Ltd. (IMP) and Lonmin Plc (LMI) may be nearing an end, further labor unrest is brewing.

The National Union of Metalworkers of South Africa said its 200,000 members in the metal and engineering industries plan to strike from July 1, after employers refused to meet their demands for a 15 percent wage increase.

The rand has slumped 3.2 percent against the dollar this year, extending last year’s 19 percent plunge, and was trading at 10.8413 as of 8:52 p.m. in Johannesburg.

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

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

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