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South Africa's mining crisis spreads

Tuesday, September 11, 2012 - 02:25

Sept. 11 - New strikes are hitting South Africa's mining Industry. Gold Fields - the world's fourth largest gold miner - is the latest victim and there's still no sign of an end to the crisis at Lonmin's Marikana mine. Hayley Platt reports.

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15 thousand strikers head for a union meeting in South Africa - but this time they're gold miners not platinum ones. Unrest across the sector has spread and production at Gold Fields KDC mine has now been suspended. (SOUNDBITE) (Zulu and English) STRIKING MINER, SHADRACK SAME, SAYING: "We want R12, 500 before deduction, we want people who were retrenched from the number one shaft to go back to work, we want our leadership to step down." (SOUNDBITE) (English) STRIKING MINER, JOHANNES MAKGALE, SAYING: "They've been telling us lies, they've been misleading the people. They do not keep their promises." The strike follows violent clashes at Lonmin's platinum mine at Marikana where 44 people were killed. Production there still hasn't resumed and the on-going wage talks are costing Lonmin dear. David Russell is Director of Global Resources at Ernst & Young. SOUNDBITE: David Russell, Director of Global Resources, Ernst & Young, saying (English): "We're facing a situation now where some of these mines have been closed for nearly a month. It becomes a situation of maintaining the safety underground and it comes a point of difficulty re-entering some of these mines when they've been closed for that length of time. You've also got to think about stock piles running down and there will come a time when they have to stop production." Lonmin is the world's third largest producer of platinum, accounting for 12 percent of global output. The strikes have wiped more than half a billion dollars off its value on the London market. And pushed the overall price of platinum up more than 16 percent. That's despite weak demand for the key component of catalytic converters. SOUNDBITE: David Russell, Director of Global Resources, Ernst & Young, saying (English): "I think the platinum group metals as a whole will reflect the insecurity of supply. It's raising questions over future investment into South Africa and security of that investment, i.e. the political risk has risen." Only 6 percent of Lonmin's miners returned to work by Monday's deadline and fear of further inter-union violence remains. Strike breakers have been threatened with death. This crisis - now in its fifth week - is showing no sign of ending making Lonmin's financial position all the more precarious. Hayley Platt, Reuters.

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South Africa's mining crisis spreads

Tuesday, September 11, 2012 - 02:25