Workers at three of Anglo American Platinum’s mines in South Africa have gone on an illegal strike.
It started one day after the company said it would close or sell some of its facilities and cut 14,000 jobs, to return to profitability.
The comes amid concerns that the country’s mining industry is shrinking too fast. Analyst Loane Sharp said: “There is a significant crisis going on in the South Africa mining industry, and what amazes me is that the government is completely inactive. South Africa’s mines employ 1.4 million people in 1994 today they employ just 523 000.”
He said the South African government is doing nothing to address the problem.
The mines minister said this has “major implications” for the South Africa’s economy and complained the government had not been consulted.
Fears of supply shortages of platinum causes prices of the precious metal to spike to three-month highs.
About 80 percent of the known reserves of platinum are in South Africa.
It is used to build emissions-limiting catalytic converters in cars and lorries, but falling vehicle sales have reduced demand, depressing the price.
The planned retrenchments and closures, which Amplats says are needed to restore profits, risk provoking a repeat of the violent wildcat strikes in the gold and platinum sectors that resulted in more than 50 deaths last year.