Bloomberg News

Zuma Rejects Criticism of Handling of Lonmin Mine Deaths

August 21, 2012

South Africa’s President Jacob Zuma rejected criticism that his handling of the most lethal police action since the end of apartheid will hurt investor confidence in the world’s biggest platinum producer.

In his first television interview on the shooting and killing of 34 mineworkers during an illegal strike at Lonmin Plc (LMI)’s Marikana mine on Aug. 16, Zuma told Bloomberg TV that he has taken decisive steps to show that his government is in control. Those include creating a judicial inquiry and a committee of cabinet ministers to investigate the incident, he said. Zuma said he won’t fire his police commissioner.

“Our observation is that nothing has happened to investor confidence,” Zuma, 70, said in an interview at his offices in Cape Town today. “I am convinced that the action that was taken so far helped to show South Africa is in control.”

The violence highlighted investor concern about law and order in an economy that relies on mining for almost two-thirds of its exports. The rand fell as much as 1.8 percent against the dollar on the day the number of dead was announced, more than any of the more than 25 emerging-market currencies monitored by Bloomberg.

“This type of event will make it more difficult for South Africa to attract foreign investment,” Carmen Altenkirch, a London-based sovereign analyst at Fitch Ratings, said by phone Aug. 17. Fitch Ratings, Standard & Poor’s and Moody’s Investors Service have a negative outlook on South Africa’s credit rating.

Self Defense

Police opened fire with automatic weapons on a crowd of about 3,000 workers, many of who were armed with spears, traditional fighting sticks and machetes after a six-day standoff. Ten people, including two police officers, had already died at the mine in fighting between members of rival labor unions in the week before the shooting.

“The global community has to look at what happened based on facts,” Zuma said. “We are talking about an incident that took two to three minutes and government moved immediately and we are in control of the situation. If I was an international, global observer, why should I get worried? You could get worried if there is continuous fighting and killing.”

Police commissioner, Riah Phiyega, who was appointed two months ago without any prior policing experience, said on Aug. 17 officers had acted in self defense after shots were fired from the crowd that was being dispersed with water cannons and tear gas. Police used live ammunition and automatic weapons after first firing rubber bullets, she said.

Public Trust

Calls for Phiyega and Police Minister Nathi Mthethwa to be fired are “most unfortunate,” Zuma said. “It’s not totally responsible when you don’t know the facts.”

Zuma is struggling to restore public trust in policing in a nation where 43 people are murdered every day. Since taking office in May 2009, Zuma has fired two police chiefs implicated in graft, while the head of crime intelligence has been suspended while he’s being investigated for abusing state funds. South Africa’s murder rate is more than six times higher than in the U.S.

The judicial panel will move quickly to investigate the incident and action will be taken against individuals where necessary, Zuma said.

“People will be held accountable,” he said. “Once we get to the bottom of what the truth is, there must be consequences. This cannot be allowed to continue.”

Lonmin Ultimatum

Zuma criticized London-based Lonmin for threatening to fire striking workers four days after the police shooting, saying the company was “insensitive.” The mining company is losing about 2,500 ounces of platinum, worth about $3.75 million at current prices, for every day of strike action.

Lonmin shares have plunged 12 percent in London since the day before the shootings, closing at 612.5 pence today.

“You make such ultimatums when there is just a strike, but when so many people have died, when people who have been with strikers have died, scores of people, I just think it was unfortunate,” he said.

Lonmin today backed down from its plan to fire striking workers. Thirty-three percent of the 28,000 workers at Marikana reported for duty today compared with less than a third yesterday, spokeswoman Susan Vey said.

To contact the reporters on this story: Mike Cohen in Cape Town at mcohen21@bloomberg.net; Nasreen Seria in Johannesburg at nseria@bloomberg.net

To contact the editor responsible for this story: John Fraher at jfraher@bloomberg.net


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