CREDIT ratings agency Fitch on Friday warned South Africa that its credit rating may be lowered following the ongoing five-month platinum strike in the country, despite unions saying a wage deal is on the horizon.
Fitch changed the country’s outlook from stable to negative, citing poor economic prospects and rising public debt.
South Africa’s economy contracted by 0.6% in the first quarter, in part because of a fall in platinum production.
Fitch said that the economic contraction in South Africa in the first quarter ‘partly reflects the long strike in the platinum sector, but manufacturing output also fell sharply’.
The ratings agency added: ‘Following its election victory in May with 62% of the vote, the African National Congress government faces a challenging task to raise the country’s growth rate and improve social conditions, which has been made more difficult by the weaker growth performance and deteriorating trends in governance and corruption.’
As the strike by platinum miners continues in its fifth month, a government bid to end the strike has failed.
New Mineral Resources Minister Advocate Ngoako Ramatlhodi last Tuesday stressed that his decision to exit the pay talks at a critical juncture was a move meant to pressurise stakeholders into a resolution.
He warned: ‘The longer the strike goes on, the more likelihood of dismissals. At some point producers will not be able to sustain operations. The situation is grim and quite serious.’
Platinum producers and the Association of Mineworkers and Construction Union (Amcu) are expected to meet again within the next day or so to take stock of where the parties stand.
Producers have warned on several occasions of impending job losses due to lost production and an increased wage bill.
AMCU treasurer Jimmy Gama said that after the coming meeting with employers, the union would consult its members on a fresh mandate. He said: ‘It is now a matter of talking to workers. Some might want to review the mandate, while others might want to continue with the demand.’
Gama added that although the union was likely to consult members on its mandate, AMCU leaders remained convinced that the R12,500 demand could be afforded by the industry.
He said: ‘There is evidence presented by researchers that shows they can pay it. The government task team was supposed to look at the numbers and come up with a proposal. But it didn’t happen that way.’
Speaking at a briefing at the Department of Mineral Resources’ (DMR’s) offices, in Pretoria, a day after the intergovernmental technical task team facilitating the pay talks dissolved, Ramatlhodi insisted that he was not abandoning South Africa’s three largest platinum producers or trade union, AMCU.
Last Monday marked the final meeting between the task team, which was established on May 28 and comprised representatives from the departments of Mineral Resources, Labour and National Treasury, and Lonmin, Anglo American Platinum (Amplats), Impala Platinum (Implats) and AMCU.
Minister Ramatlhodi said: ‘The simple reason behind this is that I strongly believe we have done enough work over the past two weeks, through the technical task team and the meetings which have been taking place daily, for the parties to take the process forward and continue engaging on their own.’
He added that both the producers and the union had shifted from their initial positions. Ramatlhodi went on to assure journalists that the negotiations continued ‘in good faith’ and, while the union’s demand of R12,500 for basic wage workers was agreed, the parties could not find common ground on the timeline for reaching this amount.
Further, AMCU and the platinum producers could not resolve emerging issues of housing allowances and the roll-out of decent houses for the mine workers.
The DMR believed the two-week facilitation by government had created a conducive environment and the task team’s pull-back would place pressure on the negotiators representing AMCU and the platinum producers to resolve the impasse.
However, investment bankers Liberum Capital warned that ‘any optimism that government intervention by … Ramatlhodi was having a positive effect has been lost.’
In a note to clients, Liberum added: ‘The unions remain unwilling to face the economic realities of their wage hike requests and the companies are unwilling to gamble on a higher platinum-group metals rand basket.’
After Ramatlhodi’s withdrawal from the process, Lonmin, Amplats and Implats issued a joint statement saying they would pursue other options. Their joint statement said: ‘During this process, the producers have sought to arrive at a fair and sustainable settlement that would preserve the future of the platinum industry and limit job losses in the country.
‘While the producers remain committed to a negotiated settlement, they will now review further options available to them.’
• Meanwhile, a leading ANC police commander has been accused of fabricating evidence at the Farlam commission inquiry into the lethal attack on striking South African platinum miners at Marikana.
Lieutenant Colonel Kaizer Modiba was the operational commander of the National Intervention Unit (NIU) members who were present at Marikana on August 16 2012, when 34 striking miners were shot and killed by the police.
Dali Mpofu SC, for the arrested and wounded mineworkers, said: ‘I am going to argue your evidence, that strikers attacked the police, should be kicked out. It’s just an anecdote.’
Mpofu said Modiba was fabricating his evidence about the violence because he had not been in a position to witness an attack. I observed the attack on the police, I have no doubt about it,’ Modiba said during cross-examination. He said he was about 100 metres away when he witnessed the attack.
But Mpofu insisted that Modiba’s evidence was a concoction of things he had heard from people, saying the mineworkers’ case was that police murdered the strikers.
Modiba responded: ‘I am not prepared to entertain the insensitive utterances you are making – labelling police as killers.’ He claimed police were faced with an imminent threat, as the strikers were carrying dangerous weapons.
Modiba and his group were tasked to provide backup support during the police’s negotiations with the strikers, and then later to sweep the koppie for weapons.
During earlier cross-examination by evidence leader advocate Matthew Chaskalson, Modiba could not recall ever seeing the police’s official crime scene policy.
He admitted that he had seen when miners were gunned down in a volley of police fire at what has become known as ‘scene one’ and was aware that injuries were probably sustained when he saw bodies lying on the ground.
His response however was to instruct the NIU members to continue to the koppie to sweep for weapons. Advocate Chaskalson criticised Modiba’s actions based on the fact that most NIU members had level three first aid qualification as part of their NIU training.
And, the evidence leader pointed out, according to the official South African Police Service crime scene policy, the first member at the crime scene ‘with due consideration of the integrity of physical evidence, must assist the injured within the limitation of his or her training as a matter of priority’.
Questioned on this, Modiba was unable to recall ever reading the police’s crime scene policy, but said that SAPS did regularly forward policy documents to unit commanders to distribute among their members.
He also admitted that at a crime scene he would normally assess any injuries and then call for medical assistance. Despite this, Modiba instructed his members to continue sweeping the koppie as per their initial briefing.
He said: ‘The shooting involved the tactical response team, which I believe had their commanders in front (so) that they could take care of that, so I was just complying with the task that was initially given to intervention (by the NIU).’
He added in evidence to the commission: ‘According to me there was nothing wrong for NIU to continue sweeping koppie one as directed. There could still be firearms or dangerous weapons that we could seize from the koppie.’
Modiba also claimed that he wasn’t sure if his members had first aid equipment with them, and he also made no effort to find out if any of the nearby police vehicles contained first aid kits.
Continuing to criticise Modiba for not deploying any of his members to assist the shot miners, advocate Chaskalson then told the commission that ‘the medical evidence suggests that if basic first aid had been applied at scene one (before the medics arrived), at least one victim would’ve survived’.
Modiba tried to brush this off by saying he was sure someone had informed the joint operational centre (JOC) of the shooting incident, even though he had not, and that it would be their responsibility to deal with the situation. The hearings continue.
