South Africa Strike Shuts Carmakers, Hits Miners

By Mike Cohen and Nicky Smith

July 23 (Bloomberg) -- A strike in four of South Africa's provinces to protest increased power prices shut car manufacturing plants and hindered people from getting to work in the several cities.

The strike, called by the Congress of South African Trade Unions, also drew support from some workers at mines owned by Anglo Platinum Ltd., Impala Platinum Holdings Ltd., Harmony Gold Mining Co. and Gold Fields Ltd.

Cosatu, South Africa's biggest labor federation, called the strike after the country's energy regulator last month allowed state-owned Eskom Holdings Ltd. to raise electricity prices by 27.5 percent, almost triple the 10.9 percent inflation rate, to help fund a $44 billion expansion. The utility provides 95 percent of South Africa's power.

``They are making a very valid point,'' Colen Garrow, chief economist at Brait SA in Johannesburg, said in an interview. ``There is a voice to be heard. South Africans are hurting.''

The labor federation staged rallies and marches in 11 towns today. About 3,000 people joined a peaceful protest in Johannesburg, the country's biggest city, while about 7,000 attended a march in the southern city of Port Elizabeth, police said.

The strike is the last of a series of protests held in the country's nine provinces this month. A nationwide strike has been called for Aug. 6. Today Cosatu called on its members in Gauteng, South Africa's richest province, to boycott work along with those in the Eastern Cape, North West and Limpopo provinces.

Car Plants

The labor action shut a car plant owned by Daimler AG in the southern town of East London while Ford Motor Co. closed its plants in Port Elizabeth and at Silverton, near the capital, Pretoria. Volkswagen AG's main plant in the southern town of Uitenhage, which usually produces 450 vehicles a day, was also shut.

In Johannesburg many privately owned minibus taxis, the main form of transport in the country, didn't run, stranding commuters.

``We have three mines and one plant that are affected,'' said Amelia Soares, a spokeswoman for Harmony, South Africa's third-biggest gold producer. ``The loss for the day will be about 32 kilograms of gold.''

Contractors, who represent about 15 percent of the company's workforce, continued to work, Soares added.

Gold Fields

Gold Fields, South Africa's second-biggest gold producer, said its Kloof mine and non-mining operations at its South Deep facility were hit by the strike, while its Driefontein mine was operating as normal, according to company spokesman Daniel Thole.

Joanne Jones, a spokeswoman for AngloGold Ashanti Ltd., the country's biggest gold producer, said the strike is having a ``limited effect'' at its West Wits mines and is expected to have a ``more significant impact'' at its Vaal Reefs operations.

DRDGold Ltd., South Africa's fourth-biggest gold producer, ``is not badly affected at all,'' spokesman James Duncan said. ``The ERPM and Blyvoor operations will be normal. At Crown surface retreatment operations one of the three plants has been affected. One plant's attendance is down to 35 percent.''

Anglo Platinum, the world's biggest platinum producer, said 73 percent of workers stayed away at its Twickenham mine. Eight percent of workers at the company's Rustenburg operations joined the strike, as did 21 percent of workers as its Waterval smelter and 36 percent at its Polokwane smelter, said company spokesman Simon Tebele.

Impala

Impala Platinum, the world's second-largest producer of the metal, said almost all employees at its Rustenburg operations attended work.

``At our Marula mine in the Eastern Bushveld, near Burgersfort, there is a 60 percent attendance,'' said Impala's investor relations officer Alice Lourens. ``That will have no material impact on Impala's production.''

Northam Platinum, which operates the world's deepest platinum mine, was unaffected by the strike, said spokeswoman Marion Brower.

Sasol Ltd., the world's largest producer of motor fuel from coal, also wasn't affected, said spokesman Johan van Rheede.

Strikes in five other provinces earlier this month forced the closure of many textile factories and crimped production at some platinum mines.

Cosatu, whose affiliate unions have about 1.8 million members, has a formal alliance with the ruling African National Congress and supports the party in parliamentary elections. The federation says the increased power prices will exacerbate poverty and unemployment.

To contact the reporters on this story: Mike Cohen in Cape Town at mcohen21@bloomberg.net; Nicky Smith in Johannesburg nsmith38@bloomberg.net