MARIKANA, South Africa: Wildcat strikers at Lonmin’s Marikana mine rejected a pay offer Friday, dimming prospects of ending five weeks of industrial action that has swept through South Africa’s platinum sector and laid bare the power struggle in the ruling African National Congress.
Workers on a rocky outcrop at the mine where police shot dead 34 protesters last month dismissed the offer as way below the 12,500 rand ($1,500) a month sought by members of the militant Association of Mineworkers and Construction Union.
“We are not interested,” striker Molifi Phele said as hundreds of stick-waving protesters chanted and danced around him on the sun-bleached grass in the heart of the ‘platinum belt,’ 100 km northwest of Johannesburg.
“What he is offering cannot buy you anything. All we want is 12,500.”
The Aug. 16 “Marikana Massacre” has poisoned industrial relations across the mines and had the potential to be “extremely damaging” to Africa’s biggest economy, Finance Minister Pravin Gordhan said, in a shift of tone from last week.
The rand fell 3 percent Wednesday as the unrest engulfed Anglo American Platinum – the world’s biggest producer – and ripples have started to reach the bond market amid concerns Pretoria might resort to throwing money at the problem.
“Things could get really ugly,” said Manik Narain, an emerging market strategist at UBS in London. “There is a risk the government will respond to the unrest with fiscal stimulus, which will not go down well with rating agencies.”
The rand was broadly flat against the dollar Friday, although it weakened briefly after police fired tear gas and stun grenades to disperse another group of striking miners at an Aquarius Platinum plant in the area.
Aquarius said it had closed the mine as a precaution. Global miner Xstrata did the same at a nearby chrome plant.
Bonds weakened slightly, pushing the yield on the benchmark three-year note up 5 basis points to 5.54 percent.
The mine shootings, the bloodiest security incident since the end of apartheid in 1994, have also made it hard for the police to use force to disperse crowds of strikers, most of whom are armed with sticks, spears and machetes.
At a news conference called by six Cabinet heavyweights, Justice Minister Jeff Radebe announced a crackdown on “illegal gatherings” and the carrying of weapons, but failed to say how the police would put it into effect.
“All those who break the law, regardless of who they are, will be dealt with the full might of the law,” Radebe said.
Police Minister Nathi Mthethwa also insisted the authorities “cannot allow this to go on” but stopped short of declaring any state of emergency or calling in the army.
The crisis, which started with a violent platinum strike in January, has turned the spotlight on the alliance between big unions and the ANC that has formed the crux of power since the end of white-minority rule.
This year’s rapid rise of AMCU, based on a push for big wage hikes, has presented a threat to a status quo under which the likes of the 30-year-old National Union of Mineworkers ensure industrial stability with more modest wage increases for workers.
President Jacob Zuma faces an internal ANC leadership election at the end of the year but is under pressure for a response that has at times appeared flat-footed and wooden.
Meanwhile, ANC renegade and silver-tongued populist Julius Malema has seized on the mess to promote himself as a champion of the millions of black South Africans whose lives have changed little since apartheid ended 18 years ago.
The Youth League leader, expelled from the ANC this year for ill-discipline, has emerged as the face of a de facto “Anyone but Zuma” campaign gathering steam as Nelson Mandela’s 100-year-old liberation movement grinds toward its December leadership election near the city of Bloemfontein.
In the face of unrest spiraling into gold mines near Johannesburg, Zuma told parliament Thursday the government would squash anybody stirring up more labor trouble, but stopped short of explicitly naming Malema.
The price of platinum, a precious metal used in jewelry and vehicle catalytic converters, has spiked more than 20 percent since the Marikana shootings amid fears of prolonged disruption to supplies.
Even though the Lonmin wage offer, which is believed to be in the region of 5,500 rand a month, was rejected, its shares rose 5.5 percent on the back of a jump in the price of platinum following the announcement of U.S. economic stimulus.