South Africa’s Ruling ANC Draws Battle Lines With AMCU Union

South Africa’s ruling African National Congress said the actions of a union that has won membership at the expense of a labor group allied to the government will slow economic growth and lead to job losses.

“Newly formed mining unions supported by the ultra-leftist groupings” display growing “anarchy,” ANC Treasurer-General Zweli Mkhize said yesterday at the National Union of Mineworkers conference in Pretoria.

Union rivalry has contributed to the deaths of at least 46 workers, cut mine output and helped make the rand the worst performer among emerging-market currencies against the dollar this year.

The NUM is an affiliate of the Congress of South African Trade Unions, or Cosatu, part of the ANC-led ruling alliance. It has been displaced by 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., Impala Platinum Ltd. and Lonmin Plc.

“The ANC is definitely drawing the battle lines here,” Susan Booysen, a political analyst with Johannesburg’s University of the Witwatersrand, said by phone today. “It’s mostly that they are portraying an image of wanting to protect the economy. They are slightly protective of the territory that Cosatu occupies -- that is a very volatile territory at the moment.”

Membership Figures

The NUM risks losing close to 60 percent of its membership, the South African Press Association reported yesterday, citing a union secretariat report. It has lost 37,000 members to the AMCU, NUM General Secretary Frans Baleni said on Johannesburg-based SAfm radio today.

In September, the NUM had 310,382 members, which at the time made it the biggest union in Cosatu, according to a report on the federation’s website. Cosatu had 2.2 million members in total.

The AMCU has a membership of 120,000, its President Joseph Mathunjwa said May 9. It represents 41 percent of miners at Anglo American Platinum, more than 50 percent at Impala Platinum and 70 percent of lower-category Lonmin workers, according to the companies.

“The NUM is not popular at the moment and they are not realistic,” Booysen said. “They are losing territory and this is also a contributor to the volatility.”

Wage Demands

In the gold and coal industries, the NUM this week asked for wage increases ranging from 10 percent to as much as 61 percent for entry-level miners. Inflation was 5.9 percent in April. Talks will start through the Chamber of Mines in June.

The rand slipped 0.3 percent to 9.5598 per dollar by 2:29 p.m. in Johannesburg, extending the drop this year to 11 percent, the most against the dollar among 24 emerging-market currencies tracked by Bloomberg.

Finance Minister Pravin Gordhan and Mineral Resources Minister Susan Shabangu are meeting leaders of mining companies today, the South African Press Association reported, citing Chamber of Mines Executive Vusi Mabena.

“We are calling for peaceful co-existence of trade unions in the mining industry,” Shabangu said today in a speech to NUM leaders in Pretoria. “The NUM is not the enemy of AMCU and AMCU is not and should not be the enemy of the NUM.”