Rand Declines to Week Low After Amplats Mine Shooting ReportChris Kay
The rand fell to its weakest level in almost a week after clashes between rival labor unions at an Anglo American Platinum Ltd. mine spurred concern of a repeat of violence that curbed production last year.
The currency of Africa’s biggest economy retreated as much as 0.4 percent to 8.8895, the lowest on a closing basis since Feb. 12, and traded at 8.8742 as of 4:27 p.m. p.m. in Johannesburg. Yields on benchmark 10.5 percent bonds due December 2026 were little changed after dropping four basis points, or 0.04 percentage point, to 7.30 percent on Feb. 15. Markets in the U.S. are closed for a public holiday today.
Shots were fired and sharp objects were used in a stand-off between the National Union of Mineworkers and the Association of Mineworkers and Construction Union labor unions at Amplat’s Siphumelele mine near Rustenburg, South African police spokesman Thulani Ngubane said by phone today. Five people were injured in a clash with security guards, Mxhasi Sithethi, NUM regional coordinator for Rustenburg, said by phone. Reports of deaths and injuries are unconfirmed, according to the police.
“The market is just very nervous with regards to things like this because this was the reason why the rand blew up last year,” Ion De Vleeschauwer, the Johannesburg-based chief dealer at Bidvest Bank, said by phone today. “If it’s an isolated event I think the reaction will probably taper off and we will see the rand coming to levels we saw earlier today, but if it’s not an isolated incident then we could be in for a spell of trouble again for the currency.”
Investor confidence has dropped after a series of mining strikes and the shooting of about 34 protesters by police at Lonmin Plc’s Marikana platinum mine last year, with the price of insuring South Africa’s dollar debt against default using credit default swaps rising to an eight-month high on Feb. 4.
Amplats is gathering details on today’s reports, spokeswoman Mpumi Sithole said in an e-mailed response to questions.