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Utopian Idealist
 
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Platinum strike will affect us all

14 May 2014, 10:43

The ongoing platinum mining strike is the tinder box that is going to ignite violence and unrest on a new scale and from this point there are only two ways things can go.

Firstly and more likely, the mining houses will refuse to negotiate any further and will issue termination of employment notice to those miners who refuse to accept their final offer and return to work. As witnessed previously at Marikana these people do not respond well to ultimatums and will surely ramp up levels of violence and intimidation. It is near impossible to do business in that sort of environment and already weary foreign investors will no doubt start pulling investment from related industries, having a substantial negative effect on the economy.

There is of course the second and less likely option, in this scenario the striking miners manage to strong arm their employers into accepting their demands and return to work. This is however, unlikely as the mining houses have unanimously declared that the salary demands are unaffordable and raising the cost of their products would make them uncompetitive in the global market place which is ultimately financial suicide. But let’s for a moment says that they are able to give these miners what they want and through a various cost cutting methods remain competitive. This would have set a precedent that will no doubt be noticed by the disgruntled workers in other industries, they will now feel empowered in the belief that if they can hold out long enough to hurt their employers, they too can enjoy a substantial increase in remuneration. Of course in this scenario once again the economy will take a huge knock as output from the effected industries slows.

Both of these scenarios form a conundrum for the ruling party. They have just won an election by campaigning on the promise of increased wages, working and living conditions for the lowest paid workers. They cannot obviously be seen to take a hard line with the miners and they will definitely not want another Marikana massacre. With service delivery strikes a daily occurrence the last thing they want right now is to make a martyr of the miners that would unite all these disenfranchised groups. In that same vein the ANC lead government cannot be seen as too soft either, as investors will surely feel that SA is not as business friendly as it once was and the expectation of further damaging strikes  will only add to their already negative view of the investment environment within the country. This comes at a time when the government has its hand out in expectation of securing further loans that will enable it to carry out its myriad of infrastructure projects detailed in the National Development Plan.       

So where to from here? I have to admit I don’t see a very bright light at the end of the tunnel. The ANC’s refusal to deal with this issue effectively pre-election has allowed it to spiral out of control and the resulting standoff can only have negative implications.

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