Chamber of Mines
chief executive
Bheki Sibiya
Cape Town, South Africa — 28 November 2012 – South Africa’s strike-battered mining sector could be facing thousands of job cuts, as well as further violent clashes between rival unions, says the country’s Chamber of Mines.

The last of South Africa’s recent crippling wildcat strikes ended last week, after leaving more than 50 dead and temporarily halting mining output in the continent’s top economy.

But Reuters reports that the three months of often violent unrest have poisoned industrial relations and the union turf war that sparked the strikes shows signs of flaring up again

Two workers at a Harmony Gold mine near Johannesburg were killed on Thursday in a clash between the once-dominant National Union of Mineworkers (NUM) and the smaller Association of Mineworkers and Construction Union (AMCU).

“That violence is likely to continue,” said Bheki Sibiya, chief executive of the Chamber of Mines, the group that represents the industry. “What is happening at Harmony is a continuation of what we have observed,” he said at the Cape Town Press Club. “I think we are still going to observe quite a bit of it before it settles.”

Sibiya also warned that the strike-hit industry would likely need to shed thousands of jobs, sobering news in a country where unemployment hovers at around 25%, and the wealth disparity is among the most glaring in the world.

“There are going to be retrenchments in the first quarter of 2013. It will probably be in the thousands, possibly going above ten thousand and maybe higher.”

Harmony, South Africa’s third-largest bullion producer, said on Friday that operations at its Kusasalethu min 65km west of Johannesburg, had not been affected by the violence that left two dead. Spokeswoman Henrika Basterfield told Reuters there were no further reports of violence at the mine.

Analysts say the tension between AMCU and the NUM, which has had its dominance challenged by the smaller union, is likely to rumble on.

The latest trouble at Harmony was unlikely to be a “one-off” event, said Loane Sharp, a labour economist at staffing firm Adcorp.

“For as long as the causes of the protests and unrest are not addressed, the mining sector will remain vulnerable to these sorts of actions by workers,” he added.

Mass job cuts in mining are likely to further strain South Africa’s battered economy. The pace of economic growth probably halved in the third quarter, according to a Reuters poll, after the strikes hit mining output.

Gross domestic product (GDP) probably grew at 1.5% in the quarter, from 3.2% in the previous three months, according to the median forecast in a poll of 15 analysts.

“The slowdown has largely been a result of the mining sector strikes, which have caused output levels in the sector to plummet,” said Shilan Shah of Capital Economics. Mining accounts for 4 to 6% of South Africa’s GDP.

Source: Reuters Africa. For more information, click here.