S. Africa union agrees to deal to end longest-ever mining strike

Updated 14 June 2014

S. Africa union agrees to deal to end longest-ever mining strike

JOHANNESBURG: South Africa’s radical AMCU union on Friday said that it had agreed in principle to a deal to end the country’s longest-ever mining strike, a day after platinum producers announced the agreement.
“In principle we have agreed to the offer,” Joseph Mathunjwa, the leader of the Association of Mineworkers and Construction Union, told the SAPA news agency.
“There are still issues that we need to consult with the employer,” the agency quoted him as saying.
A local union leader said earlier the conditions include the rehiring of a group of workers who were fired in April after striking illegally.
Mathunjwa’s comments came a day after South Africa’s three main platinum producers — Anglo American Platinum, Impala Platinum and Lonmin — said that they had struck a deal in principle that union leaders would now take to members for final approval.
The strike at South Africa’s platinum mines began in January, when tens of thousands of workers downed tools demanding higher wages, and has crippled the sector.
The new wage offer for lowest-paid workers includes a 1,000-rand ($90, 70 euro) raise in monthly salary for two years, then 950 rands for the following three years, according to a statement from Impala Platinum.
The deal would be backdated to July last year for Implats and Amplats, while Lonmin would implement the raises from last October.
This would practically double the current minimum wage of 5,500 rand to 10,500 rand ($980, 720 euro) by July 1, 2017, and effectively preempt further strikes for the next five years.
Other worker categories would get an 8.0-percent raise for 2013 and 2014, then 7.5 percent the next three years.
“Our proposal is basically for a 1,000 rands a month for five years, Implats spokesman Johan Theron told AFP.
“But the feedback we are receiving from the mass meetings is that they are saying perhaps they only want the first three years and maybe not all the five years.”
This would suggest the workers might consider a fresh strike and negotiations within three years.
The offer would fall short of the 12,500 rand ($1,160, 860 euros) the workers demanded, a figure used as rallying cry over the past two years that propelled AMCU to prominence.
The employers were still awaiting AMCU’s official response, said Theron.
The five-month work stoppage helped push the country’s economy into contraction in the first quarter of this year, the first time since the global economic crisis five years ago.
South Africa holds around 80 percent of the world’s known platinum reserves, and platinum group metals raked in 9.0 percent of export earnings last year.
The Fitch ratings agency on Friday revised South Africa’s outlook to negative from stable, and affirmed its credit rating at “BBB”, near the bottom of the investment-grade scale. partly because of the effect that the strike has had on the economy.
Fitch said South Africa’s outlook for growth had deteriorated after a 0.6-percent contraction in the first quarter of this year, and it revised its 2014 GDP growth forecast down to 1.7 percent from the 2.8 percent that it issued during the last country review in December 2013.
The agency said that the government “faces a challenging task to raise the country’s growth rate and improve social conditions, which has been made more difficult by the weaker growth performance and deteriorating trends in governance and corruption.”
“This will require an acceleration of structural reforms,” it said.
The agency also voiced concern over President Jacob Zuma’s new cabinet, appointed after general elections last month returned his African National Congress to power and secured him a second term in office.
“In Fitch’s view, the track record of some key ministerial appointments and shortcomings in administrative capacity mean this is subject to downside risks.”
The country’s Treasury noted that the government is aware of the “challenges South Africa faces.”
It said the government has “prioritized” an ambitious National Development Plan which will kickstart the economy and reduce poverty by 2030, notably through major infrastructure projects.
The program was approved in 2012, but implementation has been piecemeal in the face of fierce opposition of left-leaning government allies, which brand it too neoliberal.


Group behind Facebook’s Libra coin announces 21 founding members

Updated 2 min 54 sec ago

Group behind Facebook’s Libra coin announces 21 founding members

  • Planned Libra global currency faces swelling criticism from regulators
  • Group of Seven warned it poses a threat to the global financial system
GENEVA: The Libra Association, created by Facebook to launch its new cryptocurrency, has announced its 21 founding members after defections by previous supporters including Visa and Mastercard.
The announcement on Monday came as the planned Libra global currency faces swelling criticism from regulators, and reported warnings from the Group of Seven that it poses a threat to the global financial system.
The group kicked off its first council meeting in Geneva and founding members including Uber, Spotify and Vodafone formally signed onto the Libra Charter, director general Bertrand Perez said.
“We now have a total guarantee of their involvement, so we have confidence in the project,” he said.
Last month, the non-profit association voiced hope that the number of companies backing it when it opened for business would swell from an initial 28 to “well over 100.”
But instead the list has shrunk, after more of its initial backers walked away amid swelling criticism from regulators around the world.
Credit card giants Visa and Mastercard, online marketplace eBay and digital payments firm Stripe each announced Friday they had changed their minds about being founding members of the association, following a similar recent announcement by digital payments firm PayPal.
The Libra Association confirmed Friday that the companies would no longer be founding members, but said it would continue building an alliance of businesses, social-good organizations, and others to implement the cryptocurrency.
Its launch was originally planned for mid-2020, but Perez said he had not ruled out a later start date.
“What we want is to build a platform that is solid, that is there to last and that will survive in the long term,” he said, adding he was still “optimistic” about reaching around 100 members as planned.
The membership departures came after US senators sent letters to several financial firms noting that they could face “a high level of scrutiny from regulators” if they participated in the new currency plan.
French economy and finance minister Bruno Le Maire had warned that under current circumstances, Libra posed a threat to the “monetary sovereignty” of governments and could not be authorized in Europe.
Facebook executives have, however, claimed the new digital coin could help lower costs for global money transfers and help those without access to the banking system.
Facebook chief Mark Zuckerberg is set to testify at an October 23 hearing in the US House of Representatives on the Libra plan.
But in a fresh blow, a draft G7 report has outlined nine major risks posed by such digital currencies, according to the BBC.
The report, due to be presented to finance ministers at International Monetary Fund’s annual meeting this week, did not single out Libra but referred to “global stablecoins” with the potential to “scale rapidly” as posing a range of potential problems.
Stablecoins are seen as more steady than cryptocurrencies like Bitcoin, since they are pegged to traditional currencies such as the US dollar or the euro.
But the G7 draft report reportedly cautioned that such currencies could pose problems for policymakers setting interest rates, and could threaten financial stability if users suddenly suffer “loss of confidence” in the digital unit.
Randal Quarles, the head of the Financial Stability Board (FSB), which oversees regulation among G20 economies, also sent a letter to G20 finance ministers Sunday warning that “global stablecoins could pose a host of challenges to the regulatory community.”
This, he wrote, was “not least because they have the potential to become systemically important, including through the substitution of domestic currencies.”
“Stablecoin projects of potentially global reach and magnitude must meet the highest regulatory standards and be subject to prudential supervision and oversight,” he insisted.