Platinum strike ‘eroding confidence in SA’
As 'negative' news coverage turns investment away from mining, Lonmin says the consequences are national.
JOHANNESBURG - There are warnings on Monday that the standstill on the platinum belt is eroding investor confidence in South Africa while coverage of the strike is turning investment away from mining companies.
The so-called living wage strike, now in its 17th week, has seen around 70,000 workers affiliated to the Association of Mineworkers and Construction Union (Amcu) take part in the industrial action.
Workers are demanding a basic salary of R12,500 a month.
Talks between Amcu leaders and mine bosses at Lonmin, Anglo American Platinum and Impala Platinum have collapsed.
Furthermore, members of the National Union of Mineworkers (NUM), which didn't join the Amcu strike, have been advised to stay home.
This after violence once again erupted in the area.
This means the mining companies face losing even more working hours.
Amcu has accused mining giants of lying about not being able to afford its wage demand, which it believes is the lowest appropriate living wage.
But Lonmin Chief Executive Officer (CEO) Ben Magara says the demands can simply not be met.
"The demand does not become any more affordable in this current market structure."
Magara says the strike has now had far-reaching effects.
"Nobody is benefitting from this and we continue to erode the investor confidence that we so much need in our country."
At the same time, media analysis released by Media Tenor suggests the focus of news coverage on the platinum strike is substantially negative for the companies themselves.
Senior researcher Stephano Radaelli says mining corporations are far more central to the coverage than in most other strikes.
"Given the current dominance of the platinum belt industrial action in the media, these strikes have had a significant impact on the overall perceptions of the platinum sector."
The study shows that half of the coverage generated for these companies is based on the strike action.
"For any other platinum mining company experiencing the same union-led strike action, they are almost exempt from the direct linkage that these other four platinum mining houses are receiving," adds Radaelli.
Read Media Tenor's full report here.