Rustenburg - South Africa's AMCU union rejected a 9 percent wage offer on Thursday from leading platinum producers, prolonging a week of industrial action that has combined with a severe emerging market sell-off to push the rand to five-year lows.
The strike has hit around 40 percent of the global supply of platinum, used in catalytic converters in cars, and magnified concerns about the trade deficit in Africa's largest economy due to its impact on a big source of foreign exchange.
Thousands of miners at a football stadium near Lonmin's Marikana mine - scene of the police killing of 34 strikers in 2012 - reacted with boos and jeers when told about the offer tabled after four days of government-brokered talks.
The union had been seeking a doubling of wages to 12,500 rand a month and its members at rival producers Anglo American Platinum and Impala Platinum reacted with similar disdain.
“The miners were angry about the offer,” AMCU branch manager Siphamandla Makhanya told Reuters.
The companies say they can ill-afford to double wages as they struggle to recover from a wave of wildcat strikes, rooted in a turf war between AMCU and the rival National Union of Mineworkers (NUM), that battered the sector in 2012 and led to dozens of deaths.
The rand, which plunged to a five-year low of 11.38 against the dollar on Wednesday despite the first central bank interest rate hike in nearly six years, plumbed further depths shortly after the AMCU decision.
MORE WILD SWINGS FEARED
At 12:01 SA time it was trading at 11.3740 against the dollar and foreign exchange dealers braced for more wild swings, either from domestic headlines or fresh bouts of emerging market selling by global investors.
“There are still two days of this week left but no end in sight of the current volatility,” Standard Bank trader Warrick Butler said.
“These are extremely difficult conditions to make a market in and have the ability to pinpoint accurate support and resistance areas when they all seem to disappear like tears in the rain.”
AMCU, which has become the dominant player on the platinum scene in the last two years, has also been trying to strike in the gold sector, where it plays second fiddle to the established National Union of Mineworkers (NUM).
But a labour court ruled on Thursday that its plans for a gold strike were illegal because NUM, as the dominant union in the sector, had already reached a wage settlement that is considered binding on all other unions.
The AMCU has until March 14 to appeal against the decision.
The strikes have had little effect on spot platinum prices so far but are eroding investor confidence in South Africa at a time when a global emerging market rout has seen the rand plunge against the dollar.
That rout forced South Africa's central bank to raise interest rates by 50 basis points on Wednesday in step with other emerging markets.
The strikes are also an unwelcome distraction to President Jacob Zuma and his ruling African National Congress ahead of elections expected in around three months' time. - Reuters