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South African platinum strikes continue

Article By: ,  Financial Analyst
June 10, 2014 10:45 AM

Strike action in South Africa's platinum mines will continue after talks over ending the protests broke down.

The strikes first began at the end of January, with workers in South African mines protesting about their pay and working conditions, with safety also a key issue for the staff members.

Mining minister Ngoako Ramatlhodi said on Saturday (June 7th) that the government could "take them to the river but not make them drink", with mines ministry spokesman Mahlodi Muofhe adding yesterday: "There is no solution for now. The minister has disengaged now from the talks.”

Anglo American Platinum, Impala Platinum and Lonmin are the three main platinum companies operating in South Africa and the trio of firms released a statement after the talks broke down.

The organisations stated that they were "committed to a negotiated settlement", but "will now review further options”.

Joseph Mathunjwa, the leader of the Association of Mineworkers and Construction Union, explained strike action will now continue as no solution has been found. The body is campaigning for workers in South Africa's platinum mines to have their basic wages more than doubled to $1,200 (£715) a month.

Economic impact

The ongoing strike action in South Africa has had a marked impact on the state of the country's economy, as mining is one of its main industries. Figures recently revealed by the nation's official statistical body showed a slump of 0.6 per cent in the economy between January and March, which was put down to the strike action.

Razia Khan at Standard Chartered Bank told BBC News that the data is "grim reading" for the South African economy, adding: "Mining, hit by protracted industrial unrest, fell almost 25 per cent on an annualised basis. Manufacturing was down 4.4 per cent."

Unless the strike action comes to an end soon, the South African economy is facing going into recession in the coming weeks. The country will enter recession if growth figures for the April to June quarter show a second period of contraction in a row.

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