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South African Mines: One Step Forward, Two Steps Back

Chicago’s teachers weren’t the only ones to end a strike this week: South Africa’s six-week mine protest finally came to an end on Tuesday when a group of protesting miners were promised a pay raise. And much like in America, the resolution of these strikes gives an embattled president new hope for reelection.

Unfortunately, this isn’t likely to be the end of the unrest at South Africa’s mines. Thousands of protesters at a number of different mines were striking, but only one company, Lomnin PLC, offered the raise. Lonmin employees, naturally, are celebrating, but other miners are still at square one and will be encouraged by their colleagues’ success to keep pressing. The Wall Street Journal goes deeper:

In an interview before the deal, Mr. Scott [acting Lonmin CEO] said a higher salary offer could hurt employment at Lonmin, which employs 28,000 workers. “The more unaffordable the settlement, the bigger impact on jobs,” he said.

Peter Montalto from Nomura warned that the deal “risks creating moral hazard and contagion,” which will hurt other mining companies struggling with thin margins and falling prices.

Indeed, it looks as though the strikes are already beginning to spread. As BBC News reports police are brutally suppressing a similar revolt at a mine owned by Anglo American:

“Police utilised tear gas and stun grenades, and rubber bullets were used at the squatter camp,” said police spokesman Captain Dennis Adriao.

“As we have said, we are not tolerating any illegal gatherings,” he said.

After weeks of unrest, the government last week announced that it would clamp down on the protests.

The damage these strikes have done to the African National Congress and President Zuma’s government will be lasting. Apart from throwing light on entrenched inequalities in South African society, they have now started a chain reaction. Other miners around the country now also want more money, and as militants in the labor movement receive more support, there will be increasing tension between the labor movement and the ruling party.

We’ll see how South Africa’s embattled democracy weathers the challenge.

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