Aug. 24 (Bloomberg) -- Unrest at South Africa’s platinum mines is politically motivated by former leaders to undermine the Congress of South African Trade Unions and current heads of the ruling party, Cosatu General Secretary Zwelinzima Vavi said.
The National Union of Mineworkers, Cosatu’s biggest affiliate, is battling to retain members in the platinum industry. Police shot and killed 34 protesters at Lonmin Plc’s Marikana complex on Aug. 16 after 10 people died in fighting among workers during a strike by rock drillers that started on Aug. 10. Impala Platinum Holdings Ltd. shut a mine for six weeks this year in a similar dispute in which four people died.
Cosatu’s alliance with the ruling African National Congress won’t be broken, Vavi told reporters in Johannesburg today. “They will fail to break the back of the NUM, they will fail to break the back of Cosatu,” he said.
At a memorial service held yesterday for those who died in the violence at Marikana, Julius Malema, the expelled president of the ANC’s youth league, told the crowd that President Jacob Zuma’s government is responsible for the deaths, saying it has become “a pig that is eating its own children.”
“We will have to do a lot of work to show workers they are falling into a trap where political hyenas are using genuine grievances to pick up emotions against the very same people who have been fighting to improve their conditions,” Vavi said.
Lonmin management met today with unions including the NUM, the Association of Mineworkers and Construction Union, Solidarity, as well as Cosatu, to try to resolve the standoff with striking workers. Labor Minister Mildred Oliphant facilitated the meeting held in Rustenburg, her department said in an e-mailed statement. They will meet again on Aug. 29 when they could sign a peace accord, Musa Zondi, Oliphant’s spokesman, said by mobile phone.
The government is investigating whether platinum-mine workers are being politically manipulated into causing unrest, Johannesburg-based Business Day reported, citing Police Minister Nathi Mthethwa.
A decline in support for the NUM, which is South Africa’s largest labor group, may allow other groups, such as the Association of Mineworkers and Construction Union, to recruit, leading to rivalry at operations and divided, lengthy pay talks.
South Africa’s mining industry has cut 131,000 jobs since 2001 as output has fallen below 1994 levels, while wage costs, adjusted for inflation, have increased 47 percent over the past decade, said Fitch Ratings, which has a BBB+ assessment, the third-lowest investment-grade level, on South African credit, with a negative outlook.
“Failure to speed up growth and sustain job creation will weaken South Africa’s credit fundamentals,” Carmen Altenkirch, an analyst at Fitch, said in a statement. “High unemployment is already associated with widespread crime, which is regularly cited as one factor deterring foreign investment. Over time it could also threaten social and political stability, damaging the investment climate further.”
The nation’s economy, the continent’s biggest, will probably expand 2.6 percent this year, according to the International Monetary Fund, less than the National Treasury’s February estimate of 2.7 percent. The government has said it needs 7 percent annual growth to cut the jobless rate to 14 percent by 2020 from 25 percent currently, the highest of more than 60 nations tracked by Bloomberg.
Lonmin said output remained at a standstill as 24 percent of workers returned following the memorial service.
“Mining operations will only resume once we have sufficient workers in attendance and the necessary safety procedures have been undertaken,” the Johannesburg-based company said in an e-mailed statement today.
Zuma declared a week of mourning, which ends on Aug. 26, after police fired on protesting workers armed with machetes, spears and pistols on Aug. 16, at Lonmin’s Marikana mine, which taps the world’s biggest platinum field, the Bushveld Complex, northwest of Johannesburg.
The operation, which accounts for about 10 percent of global platinum output, has lost 2,500 ounces of output daily since the strike started. Lonmin is the third-biggest producer of the metal, used in jewelry and anti-pollution devices.
Worker discontent has spread to other platinum operations in the area. Anglo American Platinum Ltd., the largest producer of the metal, said 100 employees out of its workforce of 4,114 refused to go underground at its Thembelani mine near Rustenburg today. The miners eventually conceded, it said in an e-mailed response to a query.
Royal Bafokeng Platinum Ltd. said an illegal strike by about 500 workers at its mine near Rustenburg ended last night. Milled output for the month will be unaffected, Royal Bafokeng said in a statement.
Lonmin’s troubles have been compounded by the illness of Chief Executive Officer Ian Farmer, who won’t return to his full-time job for “some months” after he was hospitalized earlier in August following an unspecified ailment, the company said in an earlier statement. Chief Financial Officer Simon Scott is acting in his position.
Lonmin won’t issue workers with any ultimatums to return at least until it has signed a peace agreement with unions, Sue Vey, a spokeswoman for the company, said by mobile phone.
Lonmin, which has declined 45 percent in past 12 months was unchanged at 640 pence by the close in London. Platinum rose 0.4 percent to $1,548.99 an ounce in the city.
To contact the reporters on this story: Matthew Hill in Johannesburg at firstname.lastname@example.org; Carli Cooke in Johannesburg at email@example.com; Andres R. Martinez in Johannesburg at firstname.lastname@example.org