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Wednesday, Aug 22, 2012 1:45 PM UTC

Higher wage demands spread to other SAfrican mines

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Topics: From the Wires,

MARIKANA, South Africa (AP) — Even as labor unrest spread to at least two more platinum mines, South African President Jacob Zuma traveled Wednesday to a mine where police killed 34 strikers and wounded another 78, causing outrage and eroding support for the party that has ruled South Africa since the end of apartheid.

There are growing political implications of demands for higher wages spreading to other mines, raising fears the instability could inflame protests at more of the South African mines that provide 75 percent of the world’s platinum.

South Africa’s miningweb.com Web site calls it “a possibly ominous development” that could have a “devastating effect on the South African economy as a whole with metals and minerals sales providing such a large part of the country’s export income.”

Platinum mines, already hit by low world prices and flagging demand, especially from vehicle makers who use the metal to control carbon emissions, may not be in a financial position to seriously consider the demands, some industry analysts say.

The shutdown at London-registered Lonmin PLC mine at Marikana where the shootings occurred has cost hundreds of millions of dollars in share value. The company said Tuesday it may have to renegotiate with bankers debt payments that are due on Sept. 30. Lonmin also said it will be unable to meet its annual target production of 750,000 ounces.

Any slowdown in South Africa’s platinum production will have little short-term effect internationally, since the platinum industry has allowed the world market to build up a surplus estimated to last between 18 months and two years, according to mining industry specialist Jan de Lange of Sake24.com, an Afrikaans-language business news Web site.

Thandi Modise, premier of North West Province where the platinum mines are located, warned Tuesday that the protests may spread if authorities don’t deal with the massive and growing inequality gap that has many South Africans feeling they have not benefited in the 18 years since black majority rule replaced a racist white minority government. South Africa has become the richest nation in Africa but still has more than 25 percent unemployment — nearer 50 percent among young people. Protests against shortages of housing, electricity and running water and poor education and health services are an almost daily affair.

That poverty is contrasted by the ostentatious lifestyles of a small elite of blacks who have become multimillionaires, often through corruption related to government tenders.

Zuma came to the troubled Lonmin mine after striking miners here heckled a committee of government ministers sent to help the grieving community with identification of bodies of slain miners, burial arrangements and bereavement counseling.

“If Jacob Zuma doesn’t want to come here, how does he expect to gain our votes?” one man shouted at the Cabinet ministers.

“Don’t you know if the miners here don’t vote for you, the ANC is going down?” another piped up, referring to the ruling African National Congress party.

Defense Minister Nosiviwe Noluthando Mapisa-Nqakula responded with the first official apology for the police killings.

“As a representative of the government, I apologize,” the minister said. “I am begging, I beg and I apologize, may you find forgiveness in your hearts.”

South Africa is the world’s leading producer of platinum and ferrochrome, the fourth-largest producer of iron ore and is among the top 10 gold producers in the world.

More Michelle Faul.

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