Friday 17 August 2012

Massacre at Lonmin Marikana Platinum Mine, Rustenburg, South Africa.

Police in South Africa have reportedly opened fire on a group of striking miners armed with sticks and machetes, killing 18 people, on Thursday 16 August 2012 (versions of this story vary slightly, some sources put the death toll as high as 38, with the BBC, London, claiming only 12 workers were killed, that the miners were armed with machetes, clubs, spears, petrol bombs and grenades, and that the police tried to disperse the protesters with tear-gas before firing; however the source of this claim is unclear as it is not reported in other news sources). Workers belonging to the Association of Mineworkers and Construction Union have been on strike at the Marikana Platinum Mine since Friday 10 August, demanding a sharp increase in wages, but mine owners, London-based Lonmin PLC, have refused to negotiate with the union and declared the strike illegal. Clashes earlier in the week led to the deaths of at least ten people, including two policemen and two security guards.

Police surveying the bodies of striking miners outside the Marikana site. AP.

The dispute is apparently partly fueled by rivalry between the official  National Union of Mineworkers, which is linked to the ruling African National Congress, and which Lonmin PLC do recognize, and the more radical Association of Mineworkers and Construction Union, which claims that improvements in the lives of mine-workers in post-Apartheid South Africa are coming to slowly, with workers still living in shantytowns and receiving very low wages 18 years after the ANC came to power. Despite not supporting the strike and urging workers to return to work, the National Union of Mineworkers has accused Lonmin of contributing to the unrest by offering allowances to some workers outside the formal bargaining process.

South Africa is the world's largest producer of Platinum, accounting for 77% of global production, and having 80% of the world's known reserves. The Marikana mine alone accounts for 12% of the world's production, with a yearly production target of 750 000 ounces (unlikely to be met this year due to the industrial action). Platinum is currently trading at slightly under US$1440 per ounce, though this has risen this week due to the fall in production at the Marikana mine. Workers at the mine are currently said to be earning around R5000 per month (~US$600), with the Association of Mineworkers and Construction Union demanding R12 500 (~US$1520). 

The incident has provoked widespread shock in South Africa, which has not seen such events since the  end of Apartheid rule in 1994. Following news of the massacre shares in Lonmin fell 6.7% on the London Stock Exchange and 7.3% in Johannesburg; the share-price has fallen 13% since the start of the strike. In January this year a similar round of strikes closed the Impala Platinum mine (the world's largest Platinum mine, accounting for 25% of global production) for six weeks, led to at least three deaths, and pushed the price of Platinum up by 15%.

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