South Africa gold miners call strike

South Africa’s gold mineworkers on Friday announced they will embark on a sector-wide strike after the collapse of wage talks, prompting fears of more turbulence ahead for Africa’s largest economy.

The country’s Chamber of Mines said it received formal notice of strike action, paving the way for a stoppage involving tens of thousands of miners from next week.

“The strike is expected to begin with effect from the night shift on Tuesday, 3 September 2013,” the chamber said in a statement.

Seven companies, including Gold Fields, AngloGold Ashanti and Harmony Gold, have been served with the strike notice.

They had offered a 6.5 percent wage hike, slightly above inflation.

Rival unions had demanded increases of 60 to 150 percent for members, in a what at times appeared to be a bidding war designed to win support.

Workers had also asked for increased housing allowances.

Employers said they remained open to more talks, but the strike is expected to be among the largest in a series of work stoppages that have buffeted South Africa since bloody platinum strikes a year ago.

The country produces around 70 percent of the world’s platinum, but despite a century of dominance it is no long the world’s largest gold producer.

But economists warn the strike will hit the country’s already struggling economy, which is still reeling from the impact of last year’s stoppages.

Efficient Group chief economist, Dawie Roodt, said although South Africa no longer produces as much gold as it used to, its production was “still crucial to the economy.”

“Work stoppage will hurt production and that is not good for exports… low export figures might even put the rand under pressure,” said Roodt.

According to the Chamber of Mines, gold mining accounts for nearly three percent of the country’s GDP.

Nedbank economist Busisiwe Radebe believes that a strike, depending on its period, might reverse the growth seen in the second quarter.

“The 3.0 percent growth recorded in the second quarter might be short-lived, given the contribution of mining to the economy,” said Radebe.

“Add to that the current wave of strikes by various industries, we should expect a dip in the next quarter,” she added.

Many hope South African exporters will be able to capitalise on the weak rand — which is trading near four year lows.

But a wave of strike action could quash those hopes.

Around 90,000 construction workers have been on a indefinite strike since Monday, demanding a 13 percent wage adjustment, against employers’ offer of six percent.

Next week, some 72,000 petrol station attendants and car dealership workers are also expected to walk out over pay.

Workers in the auto manufacturing industry are said to be considering a revised offer by employers, after staying away from work for nearly two weeks.

The gold industry strike comes as some companies are looking at restructuring their operations to reduce cost.

On August 15, newly established medium-sized miner Sibanye Gold said it plans to cut up to 1,600 jobs.

Once the world’s largest gold producer, South Africa’s mining sector has been knocked by chronic underinvestment and poor labour relations.

The ruling ANC aligned National Union of Mineworkers (NUM) said the strike was a “last resort by the workers” after the employers had failed to meet their demands for “a living wage.”

“This is what things have come down to,” said spokesman Lesiba Seshoka.

“But we are still open to talks. Workers do not always plan to go on strikes,” he said.