Lonmin: union talks falter
Worrying news from South Africa. London-listed miner Lonmin has said that talks with Amcu (Association of Mineworkers and Construction Union) – the more radical and growing union – will not resume on Thursday.
Amcu previously said that strikes would follow if negotiations over union recognition went unresolved. Amcu now represents over 70 per cent of Lonmin workers, usurping the more closely government-aligned National Union of Mineworkers (NUM). Continue reading »
Rand drops on latest mine death
The South African rand weakened on Friday amid continued violent unrest in the mining industry. A striking miner was reportedly killed by a police rubber bullet during protests in the Rustenburg platinum mining region and Shell, the Anglo-Dutch oil company, said it could not guarantee fuel deliveries in Johannesburg for safety reasons.
The currency lost 2 per cent of its value against the US dollar to trade at R8.68, close to its weakest point for the year, before recovering slightly to trade 1.4 per cent weaker. Continue reading »
S Africa stocks ride out storm – for now
Since a spate of wildcat strikes erupted across South Africa, the headlines have been damning and the image of Africa’s most developed economy has been severely tarnished. But, so far, the country’s equity and bond markets have managed to buck the trend of negativity.
In the weeks since the unrest broke out in the country’s rich platinum belt and spread to gold, the Johannesburg Stock Exchange has hit new highs in rand terms and is up by over 5 per cent since August 1. Continue reading »
SA strikes close AngloGold Ashanti
The Marikana miners may have agreed a settlement with Lonmin, but South African mining strikes are far from over. AngloGold Ashanti is now in the eye of the storm.
After closing its Kopanang mine after a strike that began last week with 5,000 workers, the company has now halted all South African operations as most of its 35,000 employees have joined the industrial action. Shares are down 3 per cent in Johannesburg on Wednesday. Continue reading »
Lonmin strike ending, tensions remain
Tuesday evening’s resolution of the strike at Lonmin, the South African platinum miner, is a welcome end to five weeks of industrial action marked by mass protests violently suppressed and 45 deaths. It certainly brought a bounce to Lonmin’s London-listed shares, up 4 per cent in early trading.
But there is a danger that the manner of its resolution could cause further unrest in the future. Continue reading »
S Africa: Shabangu interview highlights
With the Marikana tragedy casting a long shadow over the South African mining industry, a key question is how the government will respond to the growing labour unrest in the sector. Andrew England, the FT’s Johannesburg correspondent interviewed mineral resources minister Susan Shabangu to find out.
Here are the highlights of the interview. The news story on FT.com is here. Continue reading »
S Africa: investors jittery as current account deficit soars, labour unrest spreads
Difficult days for South Africa. Not only is the mining industry in turmoil but the current account deficit has suddenly soared to 6.4 per cent of GDP, the biggest gap since 2008, according to data published on Tuesday.
Equity investors have been selling in droves – on Tuesday it was Impala Platinum’s turn to fall nearly 5 per cent on news of an unexpected wage demand. But fixed income fund managers have been pouring into the country, bouyed by South Africa’s imminent inclusion in a key Citigroup global bond index.
Were bond buyers to have a change of heart, it would spell trouble – and a decline in the rand. It fell 1 per cent early on Tuesday; though it later recovered a bit, trading was very volatile. Continue reading »
Guest post: South African mining must look to the future
By Peter Major of Cadiz Corporate Solutions
While platinum is a very valuable metal, platinum mining is a difficult business with a mediocre profit record.
That’s the commercial reality behind the recent tragic events at Lonmin’s Marikana mine in South Africa – and the underlying dispute between the managers and the workers. Continue reading »
Lonmin: shares rally on settlement hopes
Shares in Lonmin jumped nearly 7 per cent early on Thursday on reports of a peace deal at the embattled Marikana platinum mine.
But, with a key trade union – the radical Association of Mineworkers and Construction Union – yet to accept the settlement, it’s not clear that this is the end of a dispute in which 44 people have been killed. The shares, which later traded 5 per cent up on the day, are still around 24 per cent down on their pre-strike level. Continue reading »
Lonmin protest boosts investor fears
Lonmin’s crisis-hit Marikana mine on Wednesday saw 3,000 striking miners stage the biggest protest since 34 workers were shot dead by police last month.
Reuters reported that police with tear gas, assault rifles, armoured vehicles and helicopters kept watch on the demonstrators in the strongest show of police force since the immediate aftermath of the shootings.
Fortunately, this time there was no violence. But any lingering hopes of an early settlement of the dispute have been firmly dispelled. Lonmin’s shares were down by nearly 5 per cent by mid-afternoon, extending to over 30 per cent the drop since the Marikana strike began a month ago. Continue reading »
S Africa: strikes hit Gold Fields
August has been a tough month for mining in South Africa, and it’s just got worse. Shares in Gold Fields, the gold producer, tumbled by as much as 8.4 per cent on Friday on the announcement of a wildcat strike by 12,000 workers in the company’s KDC mine, before recovering to down 2.84 per cent.
The company’s statement said that the strikes started on Wednesday night, and two night shifts as well as two day shifts have been lost. While a Gold Fields spokesman said there was “no evidence” of any connection to the strikes that have hit Lonmin, the platinum miner, which resulted in 44 deaths, it’s hard to see how miners at KDC would be unaffected by or oblivious to events that have dominated South African headlines. Continue reading »
S Africa GDP: up on mining, for now
For South Africa right now, it’s all about mining. The labour unrest that has hit Lonmin’s mines dominates the news from the continent.
Dig into the GDP data released on Tuesday, and mining is also the big story. GDP for the second quarter came in at 3.2 per cent up on the previous quarter when it was 2.7 per cent. But any thoughts that South Africa’s economy is evading the global slowdown should be banished. The bounce back is all about the trials and tribulations of the local mining industry. Continue reading »
S African mining: counting the cost
South Africa on Thursday was preparing to mourn the death of the miners killed at the Marikana platinum mine with a memorial at the complex and other services across the country.
The focus is rightly on the human cost of the tragedy after 34 workers were killed by police last week after 10 others, including two policemen, died in violent clashes during a prolonged strike at the Lonmin mine.
But political and economic considerations are never far away, given the central role of mining in South Africa. Continue reading »
S African platinum: mine unrest spreads
Labour unrest in African mining isn’t stopping at the Lonmin Marikana mine where South African police last week shot dead 34 strikers.
Anglo American Platinum , the world’s largest producer of the precious metal, said on Wednesday that it had received a demand for a pay increase from its South African workers, while a trade union said miners at Royal Bafokeng Platinum‘s Rasimone site were blocked from reporting to work by colleagues, Reuters reported. With Marikana still largely strike-bound, the threat of further lost production in platinum looms large – and could extend to gold and other commodities. Continue reading »
Lonmin: killings cast a long shadow
The killing of more than 30 striking miners by South African police on Thursday has shocked the country and the industry and reverberated around the financial markets.
Shares in Lonmin, the platinum mining group at the centre of the dispute, plunged by 10 per cent in Johannesburg early on Friday as details of the shootings at the company’s Marikana mining complex near Rustenburg were revealed.
While shares in Impala Platinum and Anglo American Platinum, the two other big operators at Rustenburg, also fell, the wider South African market barely moved.
Perhaps, investors are still weighing their responses. They would be wise not to underestimate the potential impact of a tragedy that has South African commentators making comparisons with the worst excesses of the apartheid regime. Continue reading »
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