South Africa's besieged mining sector may result critically affected by the eventual failure of the ongoing wage negotiations, one of the most difficult in years, as they risk destroying the country’s largest export industry and threatening its credit rating, warned Tuesday the Chamber of Mines.
“Neither the industry nor the country can afford yet another wave of calamitous workplace disorder that delivers additional global uncertainty and becomes the cause of further downgrades of South Africa’s sovereign credit rating,” Bheki Sibiya, the chamber’s chief executive officer, wrote in local paper Business Day.
He added the chamber, which represents the country’s main gold producers, such as AngloGold Ashanti (NYSE: AU) (ASX: AGG), and Gold Fields (NYSE: GFI), believes in the adoption of a “zero-tolerance approach” to intimidation, violence and any disregard for the constitution and other laws of the country coming from either unions or companies.
The two main mining sectors, platinum and gold, are under pressure from spiralling costs and weaker commodity prices. They have warned than any significant increase in wages will risk more job losses and trigger closures.
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