The rand take a battering and the government warns against planned strikes this week by gold and platinum mine workers.
The South African government has warned that the country cannot afford industrial action, ahead of a planned strike this week at the world’s top three platinum producers.
Finance Minister Pravin Gordhan issued the warning as the platinum industry’s main trade union served notice on Anglo American Platinum, Lonmin and Impala Platinum.
South African industry has been hit by a series of sometimes violent strikes in the factory and mining sectors.
Growth has been constrained to a sluggish 2% in 2013, which has thwarted job creation by President Jacob Zuma’s administration.
The African National Congress has ruled since white minority rule ended in 1994, but the Mr Zuma’s party has suffered increasing hostility after failing to improve living standards.
On Monday, Platinum producers Anglo American Platinum, Lonmin and Impala Platinum confirmed they had received notice from the Association of Mineworkers and Construction Union (AMCU) to strike in 48 hours.
Industry experts now predict the onset of unrest to hit the sector.
The trade body representing the bullion producers said it hoped to thwart AMCU industrial action at three gold mining locations through court orders.
The AMCU has rejected an 8% pay hike that rival union National Union of Mineworkers (NUM) – which still represents most gold miners – negotiated with mine firms last year.
The South African currency has taken a battering in recent months.
The rand has lost 4% in 2014 against the US dollar, and now hovers near five-year lows after the strike plans were announced.
More than 50 people died in violent mine protests in 2012, amid claims of police brutality and firing on striking workers.
The impact on Africa’s biggest economy prompted rating agencies Moody’s, Fitch, and Standard and Poor’s to downgrade the country.
This prompted the rand losing value by around a quarter.
“The platinum industry needs to seriously get around the table,” Mr Gordhan said.
“We can least afford another round of strikes that will act as a destabilisation to the platinum sector, which has had increasing difficulties over the last 18 months.
Source : Sky News