Anglo American Platinum Sacks 12,000 Striking Miners in South Africa

on Oct 8, 2012

Anglo American Platinum (PINK:AGPPY), or Amplats, have fired 12,00 striking workers following three weeks of industrial unrest over pay and working conditions. The world’s biggest producer of platinum made the decision on Friday (5 October 2012) after violent clashes between South African police and the company’s employees left another person dead in the ongoing mining turmoil.

Citing a September court order, Anglo American Platinum said that its workers’ three-week strike is illegal and costs the company 39,000 ounces in lost platinum output, which translates into 700 million South African rand (£51 million) in lost revenue. Despite Amplats’s repeated calls for employees to return to work, attendance at four of the company’s mines in the Rustenburg area remained less than 20 per cent, with only essential services being carried out.

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!m[](/uploads/story/533/thumbs/pic1_inline.png)”Approximately 12,000 striking employees chose not to make representations, nor attend the hearings, and have therefore been dismissed in their absence,” Anglo American Platinum said in a statement Friday. The company added that other workers who attended the hearings would be informed of the outcome later Friday.

Anglo American Platinum’s miners are demanding higher salaries after rival firm Lonmin (LON:LMI) gave its staff a 22 per cent pay rise following weeks of unrest that saw 34 people shot dead in clashes with police. Lonmin’s bloody dispute threatened to be repeated on Thursday night after an Amplats worker died in clashes with the police. Following the report of the death, Anglo American Platinum said that the company had “no alternative but to dismiss” workers.

Anglo American Platinum is the first company to take such action since wildcat strikes erupted in South Africa’s mining industry in August, and its tough stance is seen as a test case for the sector battling its worst crisis since the end of apartheid in 1994. The move, however, is likely to heighten tensions in South Africa and spark further violence. Strike leader Gaddafi Mdoda stated that the fired miners would continue and even step up their protest, despite no longer being employed by Anglo American Platinum.

Since the South African mining industry unrest has started, about 75,000 miners are believed to have gone out on strike, representing nearly 15 per cent of the nation’s mining work force. The walkouts are illegal, not following rules which govern union action, hence the strong presence of police intervention which has been witnessed. In an attempt to end the industry’s turmoil and stabilise the economy, the Ministry of Labour announced on Friday that it was launching a new initiative to create centralised bargaining for the mining sector.
The dispute, however, continues to unnerve companies and investors with the fear that the government has been unable to prevent a core industry from slipping into crisis, analysts say. Moody’s Investors Service cut South Africa’s debt rating a notch last week to Baa1 from A3, saying the nation’s leaders demonstrated a “reduced capacity” to manage “the current political and economic situation.” Baa ratings reflect “moderate credit risk,” according to the Moody’s website.


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