Platinum strikes could drive S.Africa into a recession - CNBC Africa

Platinum strikes could drive S.Africa into a recession

Mining

by Trust Matsilele 0

Too much emphasis is being put on the right to strike and not the right to work. PHOTO: Getty Images

The Department of Mineral Resources estimates that about 1.4 million people have been affected by the ongoing strikes though analysts argue that the figure is far from representing the reality on the ground.

“If you take loss in production of over four months and put that in figures, the loss in production could shed off between 0.8 per cent and one per cent of growth in the gross domestic product,” Andre Cilliers, director and client relationship manager at TreasuryOne Team told CNBC Africa.

(READ MORE: S.Africa platinum talks start, no immediate end seen to strikes)

“That potential loss will push South Africa to a growth rate that is below two per cent and push the country back into recession.”

Cilliers noted that if one looked at the number of people striking and quantify the loss in income, the amount would be between 1.6 billion rand to 2 billion rand.  

The platinum sector represents 2.5 per cent of South Africa’s GDP which is substantial factoring that the negative effects on the sector would spiral to other sub sectors.

“Apart from the platinum sector, investors will look at us and say do I want to put my money into a country like that,” Cilliers warned.  

(READ MORE: Mining strikes tains S.Africa's investor confidence)

He also cautioned over the bias manner with which the mining strikes were given attention.

“Too much emphasis is being put on the right to strike and not the right to work, there is need for a change in the emphasis. We need to get to a stage when we say we can have wage negotiations while still working and producing,” he added.

Cilliers posited that the government should enforce the right to work and even give protection to those miners willing to return to work.

BY TRUST MATSILELE

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