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When will mining strikes ever end?

Tuesday, June 10, 2014 - 02:33

June 10 - Now wage talks between striking unions and platinum producers have been abandoned Joanna Partridge looks at the implications for a South African economy already heading towards recession.

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It's dragged on for five whole months and is now pushing South Africa towards recession. Strikes at the country's platinum mines over wages are deadlocked. Even the Mining Minister - who was trying to broker an agreement between platinum producers and the unions - has thrown in the towel. The government had warned it would pull out of its mediating role if the two sides didn't reach a deal by Monday. SOUNDBITE: MINING MINISTER, NGOAKO RAMATLHODI, SAYING (English): "We can't prolong the negotiations beyond a certain period, two weeks is reasonable enough for me, with the work we have done, effort we have put, not sleeping, working around the clock, two weeks shout be enough to break the deadlock." It was back in January that around 70,000 members of the AMCU union downed tools at mines run by the world's top three platinum producers - Anglo American Platinum, Impala Platinum and Lonmin. They're demanding more than double their basic wage. The companies have said that's unaffordable and unrealistic, as the industry is already fighting higher production costs. Loane Sharp, a labour analyst at Adcorp, believes the two sides are so far apart, the only way to break the strike now is through the courts. SOUNDBITE: LOANE SHARP, LABOUR ANALYST, ADCORP, SAYING (English): "We've had government interference from the beginning, we've had disastrous interactions from the police, we've had the silent Minister of Labour, we've had the CCMA and the Labour Court, we've now got the Minister of Mines involved, companies have tried to resolve the dispute directly, the whole situation is a crisis." A crisis that has serious consequences for Africa's most advanced economy. The walkout has stopped work at mines which usually account for 40% of global platinum output. The Central Bank Governor has warned South Africa is facing "enormous headwinds" - due to self-inflicted domestic problems. The rand is at a five year low against the dollar and the economy shrank in the first quarter - due to mining and manufacturing issues. The Bank predicts 2% growth this year. But long strikes and unrest don't help South Africa's image. SOUNDBITE: LOANE SHARP, LABOUR ANALYST, ADCORP, SAYING (English): "Mining in South Africa will eventually decline to insignificance, we have at the moment 550 000 workers in mining, we're expecting at Adcorp that, that will fall by about 220 000 over the next three years" The unemployment rate already stands at 25% - a significant loss of mining jobs would only make that worse.