Johannesburg - The recent deadly strikes at Lonmin's Marikana Platinum mine in South Africa revealed the country's “structural problems” which could damage investment, Fitch rating agency said on Friday.
“The protests highlight broader structural problems that have long weighed on South Africa's rating,” Fitch said in a statement.
“These include policy uncertainty, particularly regarding the mining sector, and lack of progress on education and labour reforms which ... has resulted in insufficient growth to create the jobs required to put a dent in an unemployment rate of 25 percent.”
About 3 000 rock drill operators at Lonmin launched an illegal strike on August 10 that quickly devolved into clashes with non-strikers.
Ten people including two police were killed, leading to the crackdown on August 16 when police gunned down 34 armed miners.
The strikes would not immediately affect South Africa's rating, but long-term failure to fix the issues would damage the country's investment climate, Fitch said.
The ruling African National Congress' recent deliberations to nationalise mines further “made South Africa a less favourable investment destination compared with peers,” Fitch said.
South Africa's mining industry has lost 131 000 jobs since 2001 because of under-investment and poor performance, according to the agency.
“By failing to capitalise on the commodity boom, the country has missed an opportunity to increase government and export revenue and to fast track development,” it said. - Sapa-AFP