How much is the platinum mine really costing us? The mines and current strikes seem so far away, it might even be something we have become used to hearing on the radio or seeing the headlines of our daily newspapers, “Unresolved strike action”; “Basic salary not agreed upon”; and “Union leaders still holding out”.
We may have even heard about the number of families who have been directly and indirectly affected by the strike. But it all seems so far away, so removed.
To date the strike has cost the economy R20 billion in lost revenue and R12 billion in lost wages. And South Africa has lost R3 to R4 billion in taxes. (Figures provided by Coronation Fund Managers) These losses will cause a ripple effect and affect other sectors later where we might see job losses. South Africa will also seem less attractive to investors.
Currently the hardest hit are the striking families and the platinum mines themselves. However, in the long term South Africa will be affected. Mines contribute around 60% to our foreign capital requirement; non-producing mines will affect the budget deficit.
South Africa has been hard hit by this strike and some market commentators are asking if the strike will spiral South Africa into another recession. Let us hope it ends soon as the short-and long-term implications are huge!
Platinum Strike
