Spreading South African Strikes Threaten Gold, Chrome Mining Production

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Could we be seeing the end of South Africa as a major mining country?

It would have been a fanciful question a few years ago.

South Africa’s total mineral reserves remain some of the world’s most valuable, with an estimated worth of $2.5 trillion, according to SouthAfrica.info. Overall, the country is estimated to have the world’s fifth-largest mining sector in terms of GDP value, contributing some 18 percent of the country’s GDP and 45 percent of its exports.

It has the world’s largest reserves of manganese and platinum group metals (PGMs) according to the US Geological Survey, and among the largest reserves of gold, diamonds, chromite ore and vanadium.

So the growing unrest among South Africa’s mining industry workforce, while nothing new, is a cause for concern to metals consumers due to the wide-ranging support and failure of traditional bodies such as the National Union of Mineworkers and the African National Congress to control the levels of violence.

Reuters reports that after seven weeks of labor unrest, as many as 75,000 miners, or 15 percent of the mining sector workforce, are already out on strike, while a national truckers’ stoppage is squeezing fuel suppliers.

So far about 50 people have been killed and the strikes are spreading from the original flash point of Lonmin’s Marikana platinum mine that we covered last month.

On Sept. 26, AngloGold Ashanti, the world’s third-largest gold producer, said it was closing its operations across the country in response to persistent strikes at its mines. Most of its 35,000 employees have stopped work, reports in the Economist mention.

Meanwhile, Jacob Zuma, the country’s president and head of the ruling African National Congress (ANC), says recent strikes at platinum and gold mines have cost South Africa 4.5 billion rand (USD 540 million) in lost production.

Strikes have spread to the iron ore sector, with Kumba Iron Ore now affected.

To be continued in Part Two.

 

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