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South African economy expected to pick as mine workers return to work

Thousands of miners at South Africa’s biggest platinum mining firms have returned to work, a day after unions signed a wage deal to end a five-month strike.

Employees at Anglo America Platinum, Impala Platinum and Lonmin will have to undergo medical checks and safety training before they begin work again. The firms said it would be “some time” before they resumed full production.


The “safety and wellness of employees was paramount”, the companies said. The firms estimate the strike has so far cost them more than 24bn rand (US$2.3bn) while employees have lost about 10.6bn rand in wages.

“It is our sincere hope that our companies, our industry, our employees and all other stakeholders will never again have to endure the pain and suffering of this unprecedented strike period. None of us, nor the country as a whole, can afford a repetition,” the chief executives of the three mining firms said in a joint statement.
The miners need medical checks and safety training before they return

The fact that South Africa’s currency gained 1% against the US dollar is a demonstration of a sigh of relief by the market.

President Jacob Zuma‘s new second term administration will also be breathing a sigh of relief because the last thing they want, as they begin a new five year term, is a recession. The economy contracted by 0.6% in the first quarter partly as a result of the strike.


The governing ANC often point out that South Africa’s problems of inequality, poverty and high unemployment will only be solved if the economy is growing at about 5% per annum.

The wage deal agreed between the Association of Mineworkers and Construction Union (AMCU) and the mining firms will see the salaries of the lowest paid workers, which are currently 5,000 rand (US$470) a month, rise by about 1,000 rand (US$90) a month each year until 2017.
Staff will also receive additional benefits such as pensions, housing and health insurance.

Workers had originally demanded that basic wages be increased to 12,500 rand (US$1,200) a month by 2017, which they called a “living wage” – the necessary amount required to live decently in the midst of rising food and transport costs in South Africa.

AMCU acknowledged that not all workers would reach a 12,500 rand a month basic wage under the new three-year deal, but has still described the outcome as a victory.
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