Earlier in the week, it was reported that the trucker strike in South Africa was beginning to destabilize critical supply chains – gas stations are running out of fuel, ATMs are running out of cash, and hospitals are burning through their limited reserves of coal supplies they use to power important processes.
The strikes, which began in the country’s massive mining sector, but then infected the trucking industry and now have municipal workers hatching similar plans, continue to spread.
Today, Anglo American, a major mine at the heart of the strikes, decided it had enough with the strike and commenced to lay off a whopping 12,000 workers.
If you still need confirmation of how bad things are starting to become in South Africa, take a look at its currency, the South African rand.
It’s in absolute freefall against the U.S. dollar this week:
Photo: Bloomberg, Business Insider
Anglo American Platinum Ltd. (AMS) fired 12,000 workers today as illegal stoppages increased. The South African Transport and Allied Workers Union said port and railway workers may join a road-freight strike. Finance Minister Pravin Gordhan is struggling to keep spending in check to control the budget deficit as the labour unrest cuts output and tax revenue, prompting Moody’s Investors Service to lower the country’s credit rating by one level to Baa1 on Sept. 27.
“It’s just general panic-driven pandemonium; I don’t think any of that news can be good for the rand,” William van Rijn, a currency dealer at Johannesburg-based Nedbank Group Ltd. (NED), said by phone. “Every dip obviously attracts local importers; they have reached the point where they are no longer living in hope and are covering whatever they can.”
Not a reassuring sign.