South Africa's biggest miners union said on Wednesday it would down tools on August 6 in a national strike that could halt production in the world's biggest source of platinum and major gold producer.
The strike has been called by the umbrella COSATU labour federation to protest job losses linked to the country's power crisis, the soaring prices of food, fuel and interest rates.
The 320,000-strong National Union of Mineworkers (NUM), the biggest affiliate of COSATU among other trade unions, has vowed to support the strike, in what may be a major showdown between unions and the authorities over the state of the economy.
The NUM said it would hold a series of protests in South Africa's nine provinces, starting on July 9 to July 23, culminating in the national stay away by its members.
The regional protests would kick off in the KwaZulu Natal province where the port city of Durban is located and end in Gauteng, in Johannesburg, South Africa's commercial hub.
We want to send a very strong message that the poor are part of this society which puts electricity, food and everything beyond their reach, Frans Baleni, NUM's General Secretary said.
Fuel costs have skyrocketed making it difficult for workers to move from the mines to see their families, he said.
Recent rate hikes have also made life unbearable for workers, driving thousands into shack life as they can no longer afford their houses while the price of basic food is unaffordable sending millions into starvation, Baleni said.
He called on all NUM's members to get behind the strike.
In the line of fire could be gold producers AngloGold Ashanti, Gold Fields, and Harmony, platinum miners Anglo Platinum, majority-owned by Anglo American Plc, which produces 40 percent of the world's supplies of the metal, and rival Impala Platinum.
Others could be coal producers BHP BIlliton, Anglo, Xstrata , Exxaro and Sasol.
The miners may incur losses that would be difficult to make up, while metal prices may jump on supply fears, analysts said.
Clearly the metals that may be affected are the ones that South Africa accounts for a significant portion of world supply, such as PGMs like platinum and rhodium, Anwaar Wagner, Cape town-based resource analyst at Old Mutual Investment Group said.
Roger Baxter, head negotiator at the Chamber of Mines, which represents the country's big miners said: We would be very very disappointed if the strike goes ahead. If its going to be a full stay away, it will add to the losses incurred by the sector after it shut down in January.
South Africa has suffered electricity shortages since the start of the year as power utility Eskom struggles to generate enough power to meet demand, causing a five-day shut down of all the country's mines.
Some miners have warned of output cuts and job losses.
Baxter said no jobs had so far been lost due to the power woes, but with most mines still operating at only 90-95 percent of normal power requirements, and forecasting lower output, analysts said that job cuts may still be on the cards.
The power shortages have dented economic growth, which fell to a 6-1/2-year low of 2.1 percent, quarter-on-quarter, in the first three months of 2008, with total mining production dropping 22 percent, unnerving investors and the government.
Further to that, Eskom was allowed to hike tariffs by 27.5 percent for the company's 2008/09 financial year, pinching consumer pockets even more.
South Africa's central bank has raised its repo rate by 5 percentage points to 12 percent since June 2006 to try tame soaring inflation, while fuel prices at the pump are at a record high, heaping a further strain on the country's working class.