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Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

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South Africa’s Platinum Production Halted By Unions

The story on major labour issues in South Africa’s platinum sector took a deadly turn this week, leading to the first mine shutdown of the year.

That came at the Zondereinde platinum mine in Limpopo province, with operator Northam Platinum being forced to halt underground production after a clash between two rival mineworkers unions.

Details are still sparse, but reports suggest the problems started when a member of the National Union of Mineworkers (NUM) was murdered Sunday in the town of Northam, near the mine. The victim was reportedly an employee of Zondereinde. Related: Why Did Natural Gas Prices Just Rise 25% In Two Weeks?

NUM members apparently blamed workers from the rival Association of Mineworkers and Construction Union (AMCU) for the death. This resulted in a confrontation between the two unions on a road near the mine Monday. During that standoff, an AMCU member was also killed in an apparent retaliation. Bringing the situation to a boil-over that prompted Northam Platinum to temporarily suspend operations at the mine for fear of further violence.

As Northam Chief Executive Officer Paul Dunne told local radio Tuesday: “We have halted underground operations for the moment until we are sure that full calm returns. We have a very significant police presence on the mine.”

As of right now, there’s no word on the underlying cause of the disputes. Although there’s been a lot of bad blood the last few years between the NMU and the AMCU — with the latter union growing rapidly, and taking members from the NMU, which was formerly South Africa’s largest mineworkers group. Related: Aviation Giants To Ramp Up Biofuels Usage

Whatever the case, it’s notable that labour issues are now having a concrete impact on production. With the Zondereinde mine producing some 300,000 ounces of platinum yearly — equivalent to over 5 percent of global production.

It looks as if this stoppage should be relatively short-lived. But the potential remains for a greater flare-up of labour problems here, and a more protracted shutdown. Watch for further news on developments at Northam.

Here’s to stopping the violence,

By Dave Forest

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