Cape Town - The rand depreciated for a fourth day and bond yields jumped after a strike at a Lonmin Plc mine sparked concern of renewed labor unrest in an industry that accounts for more than half of South Africa’s exports.
Operations were suspended at all 13 shafts of Lonmin’s Marikana platinum mine after a labor union official was killed on May 11, spokeswoman Sue Vey said today.
Violent strikes that started at Lonmin last year cost South African miners as much as 15 billion rand ($1.6 billion) in revenue and contributed to the rand’s 5.1 percent slide in December.
The Lonmin strike could be a “thorn in the rand’s side today,” George Glynos, a Johannesburg-based analyst at ETM Analytics, said in e-mailed comments.
“Given the backdrop of the impact strike activity had last year, this is unwelcome news. Investors should prepare themselves for more disruptions from the unions.”
South Africa’s currency declined as much as 0.3 percent and traded 0.1 percent weaker at 9.1671 per dollar as of 8:40 a.m. in Johannesburg.
Yields on benchmark 10.5 percent bonds due December 2026 climbed five basis points, or 0.05 percentage point, to 6.76 percent, the highest since April 29. - Bloomberg News