So after 5 long months of negotiating, declining and negotiating again, the platinum strike is finally over after members agreed to a wage settlement. South Africa’s AMCU union (The Association of Mineworkers and Construction Union) declared the strike “officially over” on Monday, 23 June 2014. Miners will be back to work on Wednesday. As much of a relief as it is to all South Africans, it’s still not the end. Not in the bigger picture.
This strike has dragged down SA’s already fragile economy. It is said that it will be several weeks before mines start producing again. There was roughly 70 000 platinum workers who partook in this strike, which caused massive, and possibly permanent, damage to South Africa.
Platinum producers claimed that they had lost more than $2 billion (R21 160 000 000) in revenue since the strike started. Mining analysts say it will take at least 3 months to get production back to the prestrike levels. The spot price of platinum fell by 1%.
Independent economist, Mike Schussler said, “It’s going to take the economy quite a few months to recover. There will probably be parts of the economy belt that never recover.”
More lasting damage to South Africa could be that foreign investors would think twice before investing in SA after seeing the ill-humoured relationship between companies and a union leadership.
“The strike has hit 40% of global production of the precious metal used for emissions capping catalytic converters in automobiles.” – fin24, SAPA, Reuters
Needless to say, SA’s mining industry and government need to repair the possibly irreparable damage done to foreign investment sentiment.
-af.reuters.com (Devon Maylie)