Amplats Refuses To Follow In Lonmin's Footsteps, Fires 12,000 Striking South African Workers

Tyler Durden's picture

Several weeks ago, the platinum producing company that started it all (after police killed 34 of its striking workers at its Marikana South African mine) Lonmin, conceded and agreed to a 22% wage hike. In doing so it once again proved that in game theory he who defects first, defects best. Shortly thereafter the strike spread to all other South African mining industries, and has even spilled over into the trucking industry, whose ongoing strike has crippled the country and threatens to paralyze all commerce. The only reason for the continued worker boldness: Lonmin folding to worker demands, in the process empowering all other workers in the African country to demand equitable treatment. Which is why today's news that that "other" platinum miner in South Africa has decided to go the opposite route, and instead of yielding to worker demands for a raise, has gone and fired 12,000 workers taking part in a three-week strike. How this dramatic shift in the balance of power affects the already struggling country, and its mining sector remains to be seen. However, if recent events are any indication, he doubt local workers will just put down their banners and go back to work as per the old status quo. In the meantime, look for ever less platinum,and gold, to be produced by this mining powerhouse.

From Reuters:

Two months of labor unrest has spread from mines to other parts of Africa's biggest economy, causing political problems for President Jacob Zuma and his ruling African National Congress (ANC), the veteran liberation movement long closely tied to unions.

 

Shell said on Friday it could not honor fuel delivery contracts around Johannesburg because of a two-week truckers' strike. Police shot dead another striking miner overnight, taking the death toll to 48 in the worst labor unrest since the end of apartheid.

 

The rand fell two percent to within sight of a three-year low against the dollar amid fears the (ANC) is powerless to manage the spreading labor unrest.

 

Zuma has been criticized for his low-key response, especially after police killed 34 strikers at Lonmin's Marikana platinum mine on August 16.

 

In a speech to business leaders late on Thursday he put a positive spin on the situation, stressing that since the end of white-minority rule South Africans have shown "the capacity to overcome difficulties when we work together".

 

"We should not seek to portray ourselves as a nation that is perpetually fighting," he said

And while the government is hopeless to do anything, casualties pile up:

More than 75,000 miners, or 15 percent of the workforce in a sector that accounts for 6 percent of output, have been out on unofficial strikes and tensions with security forces and mining bosses are running high.

 

Near the "platinum belt" city of Rustenburg, 120 km (70 miles) northwest of Johannesburg, workers said a miner was killed by a rubber bullet fired by police overnight.

 

"He was shot here by the police," Mbubhu Lolo, a striker from Anglo American Platinum, also known as Amplats, told Reuters, pointing to his midriff.

 

Police would not confirm the cause of the death, although the ground nearby was strewn with spent rubber-bullet shell casings and teargas canisters after clashes involving water cannon the previous evening.

 

On Friday, protesters in a shanty town near the Amplats mine barricaded streets with rocks and burning tyres, watched by a contingent of more than 30 riot police backed by armored vehicles.

 

Earlier in the week, strikers torched an Amplats training centre and two conveyor belts, making it harder to restart operations when it does manage to resolve the standoff.

In the meantime, the entire economy is grinding to a halt:

The mining sector unrest has shaken investor confidence, and signs of it spreading into manufacturing - which accounts for 15 percent of output - and an expanding truckers' strike have caused even more alarm.

 

"There is fuel available across the country, so the issue is not fuel supply, but the challenge is delivering it safely to our retail sites," oil giant Shell said after invoking a "force majeure" clause that allows it to break contracts due to situations beyond its control.

 

Other petrol companies are holding their breath, especially around the commercial hub Johannesburg, but have not yet followed Shell's move.

 

Raising the stakes in its two-week stoppage by 20,000 truckers, the SATAWU transport union said it wanted co-workers on South Africa's railways and ports to strike next week, a development that would affect coal and other mineral shipments.

 

Coal output from one of the world's biggest suppliers has so far been unaffected but any disruption could hit power utility Eskom, which is already struggling to prevent a repeat of a 2008 power crisis when the grid nearly collapsed. Some 85 percent of South Africa's electricity is generated by coal-fired plants.

 

Many supermarkets and logistics firms are running on back-up plans because of the truckers' strike. U.S. car giant General Motors said production at its Port Elizabeth plant on the south coast has been affected.

All that remains now is for the USDZAR to continue surging, hyperinflation to quietly come knocking in a full repeat of Iran, and for the government to be replaced by yet another technocrat instituted by none other than the bank with all the tentacles, and which already controls North America, and Europe: Goldman Sachs. Remember: Africa is the only continent left that still has secured debt capacity - the rest of the world has long been tapped out.