South African Strikes Spread To Truckers, Factory Workers

By Roland Li | October 04 2012 12:44 PM

South Africa's wildcat strikes, which slashed production at several large gold and platinum mines this summer and left scores dead in violent clashes with police, has spread to truck drivers, more than 20,000 of whom have stopped delivering goods, and a car factory.

Reuters

Mineworkers take part in a march on Monday at Lonmin's Marikana mine, in South Africa's North West Province.

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Last month platinum miners in Africa's largest economy went back to work after getting pay hikes of 11 percent to 22 percent. Lonmin PLC (London:LMI) and Anglo American PLC (London:AAL) had to scale back production forecasts because of the work stoppages.

Now the strikes have spread to truckers, who handle about 80 percent of all South African freight. The action is causing cash shortages in ATMs, emptying fuel stations and denying coal supplies for hospitals, reported AFP. Strikers protested throughout the country this week, attacking non-striking workers and setting delivery trucks on fire. Drivers are seeking a 12 percent wage increase in 2013 and 2014, rejecting an 8 percent increase offered by employers, according to AFP.

In addition, Toyota Motor Corp. (NYSE: TM) said Thursday it was forced to close its factory in Durban for four days due to an illegal strike, according to Reuters. Union leaders said workers would return to work on Friday after gaining a 5.4 percent pay raise.

Around 75,000 precious metal miners, or 15 percent of the local sector's labor force, are also on strike. They are demanding similar wage increases, arguing that their current salaries are not enough to live on. The strikes, some of which began early last summer, have affected companies including Gold One International Ltd. (Australia: GDO), Anglo American and Lonmin. Last month, 46 workers and police were killed in clashes at Lonmin's Marikana mine, and the company eventually conceded a 22 percent pay raise to workers. The move stopped local strikes, but the rest of the sector remains in turmoil.

There are fears that unrest could spread to coal companies, which account for 70,000 workers, compared to 160,000 gold miners and 180,000 platinum miners. Workers have refused to work at Coal of Africa Ltd. (Australia: CZA) and Petmin Ltd. (London: PTMN).

"There is potential for some noise (from the workforce), the situation should be manageable, but sometimes logic goes out of the window," one coal executive told Reuters. South Africa is one of the top five thermal coal exporters, shipping over half of its annual 77.1 million tons of exports to Asia.

The South African rand exchange rate fell 0.97 percent to 11.7 cents in mid-Thursday trading.