One-Fifth of World's Platinum Output Idled After Killings
About a fifth of global platinum production capacity was idled in South Africa today as the nation held a day of mourning for 44 miners and policemen killed in the deadliest police violence since apartheid ended.
Impala Platinum Holdings Ltd. (IMP), the second-largest producer, has suspended work for a day at the Rustenburg operation to let workers to attend memorial services, it said in a statement. Rustenburg and Lonmin Plc (LMI)'s Marikana mine, where police killed 34 protesters on Aug. 16, both tap the world's richest platinum reserves, northwest of Johannesburg. More than 1,000 workers from Royal Bafokeng Platinum Ltd. (RBP)'s Rasimone mine returned today after a stoppage yesterday, the National Union of Mineworkers said in an e-mailed statement.
The police shootings occurred after 10 people, including two police officers, died in fighting among workers and union members during an illegal strike by drillers that started on Aug. 10. President Jacob Zuma declared a week of mourning and agreed to set up a judicial commission of inquiry after police fired on protesting workers armed with machetes and pistols.
"It is not acceptable for people to die where talks can be held," Zuma told more than 1,000 striking miners yesterday, about 250 meters (820 feet) from the outcrop where the killings took place.
Burial Rituals
About 6,000 people attended a memorial service at Marikana today, where groups of crying family members of those killed performed burial rituals in the field where the miners were shot. Strike leaders led the crowd in war songs and vowed to keep to demands for wage increases. More services will be held throughout the country.
"Even you murderers, we welcome you here," said Zolani Bhodlani, a Lonmin worker representative, referring to police in a speech. "As long as you're not wearing that uniform." There was no visible police presence at the ceremony.
Zuma will name the members of a commission of inquiry in the shootings today, his office said in an e-mailed statement.
The violence highlighted investor concern about law and order in an economy that relies on mining for almost two-thirds of its exports. Producers of platinum in South Africa, which has the world's largest reserves, have cut spending and idled mines following above-inflation cost increases and lower prices for the metal, used in jewelry and anti-pollution devices.
Hurt Image
The violence may harm the image of platinum as a luxury jewelry product, Credit Suisse AG (CSGN) analysts including Nihal Shah and Liam Fitzpatrick said in a note yesterday.
"It seems possible, if not probable, that the scenes reported from South Africa will have at least a temporary effect on the appeal of platinum to certain sectors of the market," they wrote.
The rock-drill operators are demanding that Lonmin increase their pay to 12,500 rand a month ($1,504). The protests turned violent because of rivalry between the emerging Association of Mineworkers and Construction Union and the dominant NUM, according to Lonmin. The operators will earn a basic wage of 5,891.89 rand next month, when an increase comes into effect from a previous agreement, and a total package with medical, housing and other allowances, of 10,512 rand, Johannesburg-based New Age newspaper reported, citing Solidarity labor union.
Strikes Spread
Worker discontent spread to a nearby mine owned by Royal Bafokeng yesterday, with operations interrupted at the company's North shaft, it said in a statement. Police said employees were demanding higher pay.
Anglo American Plc (AAL)'s platinum unit, the world's largest producer of the metal, said workers in South Africa made demands directly to the company on Aug. 17.
Lonmin has the capacity to produce about 750,000 ounces a year, mostly at its Marikana mine. Impala's Rustenburg mine produced the same amount in its last financial year after production was slashed by a strike.
Platinum has gained as much as 12 percent to $1,561.50 an ounce since the shooting. It was trading at $1,539.24 an ounce at 12:30 p.m. in London.
To contact the reporters on this story: Carli Cooke in Johannesburg at clourens@bloomberg.net; Sikonathi Mantshantsha in Johannesburg at sikonathim@bloomberg.net
To contact the editors responsible for this story: Amanda Jordan at ajordan11@bloomberg.net; Kenneth Wong at kwong11@bloomberg.net
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