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Marikana, South Africa - South African mines producing half the world's platinum shut down on Thursday as the sector's main union began a strike for hefty wage hikes their employers say they cannot pay.
Members of the Association of Mineworkers and Construction Union (AMCU), walked out at Anglo American Platinum, Impala Platinum and Lonmin, the top three producers of the metal used in catalytic converters in cars.
The chief executives of the three companies have said the wage demands are “unaffordable and unrealistic” and warned the industry could ill afford further production and job losses.
The latest wave of labour unrest put the rand on the ropes, knocking it to a new-five year low of 10.9795 against the dollar as investors fretted about the impact of the strikes on an already fragile economy.
Amplats said the strike had affected mining at its Union, Rustenburg and Amandelbult sites, where low attendance was recorded. All processing operations were operating normally.
Implats closed its mines, processing units and smelter at Rustenburg, northwest of Johannesburg, on Wednesday ahead of the strike to ensure the safety of its employees.
Lonmin said only 15 percent of the workforce at its Marikana mines reported for duty and the company was expected to lose about 3,100 platinum ounces per day during the strike.
AMCU, whose emergence two years ago has thrown labour relations in the mining industry into turmoil, has as many as 100,000 members in the platinum belt, 120 km (70 miles) northwest of Johannesburg.
It was unclear if all AMCU members had heeded the call to strike but about 3,000 strikers gathered for a rally near Lonmin's Marikana on Thursday.
Several AMCU activists danced and sang songs calling on President Jacob Zuma and the African National Congress (ANC) officials to “stop the foolishness”.
“We are paid peanuts. And the cost of living is too high,” said one striker at an Amplats mine.
“If they don't meet our demands, we will keep striking.”
The government, led by Deputy President Kgalema Motlanthe, has offered to mediate to try to end the dispute, which threatens to further squeeze an already struggling economy.
Besides economic damage, Zuma and the ANC want to end labour unrest before general elections due in about three months.
But the government has been unable to soothe tensions in the platinum belt, where miners are angry about their lack of economic progress two decades after the end of apartheid.
“There is no concrete government action to prevent the kind of rolling strikes that we are seeing now for eleven months of the year,” labour economist Loane Sharp said.
“I think government has lost control of the labour movement in South Africa.”
The companies have indicated that they are willing to engage with AMCU and the union said on Thursday it had received a mandate from its members to participate in the talks.
“Striking is not a constructive solution if we are to return the company to a sustainable financial footing and secure existing jobs,” Amplats chief executive Chris Griffith said in a statement.
AMCU is seeking a more than doubling of the basic entry-level wage from Amplats and Lonmin and smaller but still steep hikes from Implats. The companies are offering increases of 7.5-8.5 percent, well above the 5.4 percent inflation rate.
The firms were battered by wildcat strikes in 2012 rooted in a turf war between AMCU and the National Union of Mineworkers (NUM) in which dozens of people were killed.
Mindful of the bloodshed and violence of the last two years, police deployed in force, especially near Lonmin's Marikana mine where 34 striking miners were shot dead by police in 2012.
AMCU had also planned to strike at several gold mines on Thursday but a court ruled the action be suspended pending a review of its legality.
It is hard to estimate the duration of the stoppage in the platinum sector amid recent signs of divisions in AMCU's ranks.
Dissidents said this week they planned to form a rival union, accusing AMCU's leaders, especially president Joseph Mathunjwa, of recklessly pursuing a damaging strike they say many miners do not want and cannot afford.
But AMCU activists in Rustenburg said the workers remained committed to a stoppage. - Reuters