Johannesburg, South Africa — 23 August 2013 – South Africa has been facing a strike wave across the mining industry and leading sectors of the economy, and labour unrest is threatening to hit its struggling gold industry, already squeezed by rising costs and falling bullion prices.

“The industry says about half of the country’s shafts are losing money at current levels, reports Fin24.

Despite appeals from President Jacob Zuma and other government leaders for peaceful wage negotiations, the National Union of Mineworkers (NUM) says its members in the construction sector will down tools from Monday.

The NUM was also consulting its membership on a strike in the gold industry, which could start next week following an impasse in salary talks with mining companies.

Although the country has fallen in the world ranking of gold producers, gold remains its main mineral export and the industrial action, including a vehicle industry strike already underway, will inflict more damage on the struggling economy.

Violent wildcat strikes in the mining industry last year cost billions of rand in lost output, dented economic growth and led to damaging downgrades of South Africa’s credit rating.

More than 50 people died in protests at the mines. The strife has also battered the rand, which dropped to a new four-year low against the dollar early yesterday.

“We trust that working together, all parties will co-operate and see value in promoting lasting labour peace in our crucial mining sector,” Zuma said. He was addressing a gathering of the 85,000-member Sactwu textile workers’ union, which is also considering a strike.

Increasing wage claims and militancy among workers struggling to make ends meet as their living costs rise, are a major problem for the government before elections scheduled for next year.

It faces accusations that since apartheid ended in 1994, the ruling African National Congress has paid more attention to the interests of a wealthy elite than to the country’s workers, unemployed and poor.

Trade minister Rob Davies recognised “a deteriorating labour relations environment, rooted in deep inequalities, in insecurities arising from changes in the fortunes of the mining industry, insufficient career paths and high levels of worker indebtedness.

"All of this, we think, has created a situation where there are very high wage demands and a loss of patience with more moderate negotiating frameworks,” he said in Cape Town.

Kevin Lings, chief economist at Stanlib, said more strikes would frighten away potential investors and increase the cost of international borrowing for South Africa, if they led to further credit downgrades.

“Overall, it has already done South Africa quite significant damage and obviously ongoing strike action will continue to undermine the ability of South Africa to prosper,” he added.

Source: Fin24. For more information, click here.