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TRADE WARS
Strikes hammer S. Africa's mining industry
by Staff Writers
Johannesburg, South Africa (UPI) Sep 28, 2012


Trouble in South Africa's mining sector has paralyzed Anglo American Platinum, the world's biggest producer of the precious metal, and other companies in a swelling industrial confrontation that's likely to get worse.

The unrest, in which 45 people have been killed, 32 of them shot by police, is threatening Africa's largest and most developed economy amid a political dogfight that could dash President Jacob Zuma's prospects of securing a second term.

Zuma, who heads the ruling African National Congress, has estimated the mine shutdowns have cost South Africa $924 million in lost production. The mining sector accounts for one-fifth of South Africa's gross domestic product, and generates more than half the country's exports.

The country supplies 80 percent of the world's platinum, one-quarter of its chrome and is among the top 10 gold producers.

AngloGold Ashanti, one of the world's major bullion producers, was also hit as the wave of strikes that began Aug. 10 proliferated across a nation that since 1994 has been seen as the trailblazer for democracy and economic progress for the African continent.

The Financial Times observed that the unrest that started at the Marikana platinum mine near Johannesburg run by major producer Lonmin has "exposed frustrations over poverty in one of the world's most unequal societies, as well as fraught labor relations as more workers become dissatisfied with their traditional unions and the ANC-led government."

A wage-hike settlement Sept. 18 by Lonmin that was supposed to end the violent 5-week walkout at Marikana, during which the killings occurred, initially raised hopes the unrest would die down.

But walkouts by tens of thousands of workers demanding higher wages have spread even wider since then, largely because of growing discontent with Zuma and the ANC, the party that led South Africa out of the era of white minority rule in nearly two decades ago.

Indeed, all the signs are that a major political showdown between the flamboyant Zuma, an ethnic Zulu and wily political operator who dominates the faction-ridden ANC, is shaping up as he maneuvers for a second five-year term.

When the ANC came to power in 1994 on a wave of black empowerment after decades of repressive white minority rule, it pledged millions of jobs, an end to poverty and institutional racism, plus new housing, schools, hospitals and freedoms denied the black majority during apartheid.

The reality has been very different and anger amid the recent tumult of strikes, and the killings they triggered, have emphasized the growing disparity between rich and poor, with Zuma and the black political elite joining the rich.

Some 40 percent of the 50 million population lives below the poverty line of $50 a month.

Youth unemployment, pegged at around 50 percent, is seen as a time bomb waiting to explode -- as it might if the current upheaval drags on.

Zuma's popularity has plummeted as he's been caught up in political and financial scandals and now faces a major challenge from former ANC youth leader Julius Malena.

He was expelled from the party supposedly for disciplinary reasons in February, although his feud with Zuma was probably a major factor.

In recent weeks, Malena, a longtime advocate of nationalizing the mining industry, urged strikers to make the mines "ungovernable."

Malena, 31, was arrested a week ago on charges of corruption, apparently following a lengthy investigation by a shadowy elite police unit known as "the Hawks."

He claimed his arrest was politically motivated, ordered by Zuma to silence him before the ANC's party congress in December where the president's political fate will be decided.

If Zuma retains leadership of the party he's a shoo-in to be returned as state president in elections due in 2014.

But he faces a serious challenge within the ANC, primarily from senior figures who are tribal opponents led by the party's deputy president, Kgalema Motlanthe.

The mining sector, the Congress of South African Trade Unions and the ANC-led government "will bring an end to the mining strike to quell the controversy and eliminate the cost to the South African economy," observed the U.S. security consultancy Stratfor.

"But this resolution will not address the more fundamental stresses on the economy that any government in Pretoria will be hard-pressed to resolve."

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