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The Impact of the 2014 Platinum Mining Strike in South Africa: An Economy-Wide Analysis

Author

Listed:
  • Heinrich Bohlmann

    (Department of Economics, University of Pretoria, Pretoria, 0002, South Africa.)

  • Petor Dixon

    (Centre of Policy Studies and Impact Project (COPS) Victoria University, Melbourne, Australia.)

  • Maureen Rimmer

    (Centre of Policy Studies and Impact Project (COPS) Victoria University, Melbourne, Australia.)

  • Jan Van Heerden

    (Department of Economics, University of Pretoria, Pretoria, 0002, South Africa.)

Abstract

In this paper we measure the economy-wide impact of the 2014 labour strike in South Africa’s platinum industry. The strike lasted five months, ending in June 2014 when producers reached an agreement with the main labour unions. The immediate impacts on local mining towns were particularly severe, but our research shows that the strike could also have long lasting negative impacts on the South African economy as a whole. We find that it is not the higher nominal wages itself that caused the most damage, but the possible reaction by investors in the mining industry towards South Africa. Investor con…dence is likely to be, at least, temporarily harmed, in which case it would take many years for the effects of the strike to disappear. We conduct our analysis using a dynamic CGE model of South Africa.

Suggested Citation

  • Heinrich Bohlmann & Petor Dixon & Maureen Rimmer & Jan Van Heerden, 2014. "The Impact of the 2014 Platinum Mining Strike in South Africa: An Economy-Wide Analysis," Working Papers 201472, University of Pretoria, Department of Economics.
    • Handle: RePEc:pre:wpaper:201472
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    References listed on IDEAS

    as
    1. Dixon, Peter B. & Koopman, Robert B. & Rimmer, Maureen T., 2013. "The MONASH Style of Computable General Equilibrium Modeling: A Framework for Practical Policy Analysis," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 23-103, Elsevier.
    2. Chappuis, Thomas & Terrie Walmsley, 2011. "Projections for World CGE Model Baselines," GTAP Research Memoranda 3728, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    3. Adams, Philip D., 2005. "Interpretation of results from CGE models such as GTAP," Journal of Policy Modeling, Elsevier, vol. 27(8), pages 941-959, November.
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    Citations

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    Cited by:

    1. Jessika A. Bohlmann & Roula Inglesi-Lotz & Heinrich R. Bohlmann, 2022. "Carbon Tax and its Impact on South African Households," Working Papers 202248, University of Pretoria, Department of Economics.
    2. Heinrich R. Bohlmann & Jessika A. Bohlmann & Roula Inglesi-Lotz, 2015. "An Economy-Wide Evaluation of New Power Generation in South Africa: The Case of Kusile and Medupi," Working Papers 524, Economic Research Southern Africa.
    3. Vladimir Zybatov, 2018. "Strategic Planning of Energy-Efficient Development of a Region of the Russian Federation," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(3), pages 941-954.
    4. Khumbuzile C. Mosoma & Heinrich R. Bohlmann & Sifiso M. Ntombela & Renee van Eyden, 2023. "Quantifying the Economic Effects of Land Reform Policy in South Africa: A Computable General Equilibrium Analysis," Working Papers 202307, University of Pretoria, Department of Economics.
    5. Jan H van Heerden, 2020. "The Possible Effects of the Extended Lockdown Period on the South African Economy: A CGE Analysis," Working Papers 202042, University of Pretoria, Department of Economics.
    6. Sifiso M. Ntombela & Heinrich R. Bohlmann & Mmatlou W. Kalaba, 2019. "Greening the South Africa’s Economy Could Benefit the Food Sector: Evidence from a Carbon Tax Policy Assessment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(2), pages 891-910, October.
    7. Bohlmann, Jessika & Bohlmann, Heinrich & Inglesi-Lotz, Roula & van Heerden, Jan, 2016. "An economy-wide evaluation of new power generation in South Africa: The case of Medupi and Kusile," Energy Policy, Elsevier, vol. 97(C), pages 450-460.
    8. Jan Van Heerden & Elizabeth Louisa Roos, 2021. "The Possible Effects of the Extended Lockdown Period on the South African Economy: A CGE Analysis," South African Journal of Economics, Economic Society of South Africa, vol. 89(1), pages 95-111, March.
    9. John E. Ataguba, 2020. "COVID-19 Pandemic, a War to be Won: Understanding its Economic Implications for Africa," Applied Health Economics and Health Policy, Springer, vol. 18(3), pages 325-328, June.
    10. Heinrich R. Bohlmann & Leoné Walters & Matthew W. Clance, 2016. "The Impact of the COMESA-EAC-SADC Tripartite Free Trade Agreement on the South African Economy," Working Papers 635, Economic Research Southern Africa.
    11. Publishers, KMF & Saha, Bijoya, 2021. "Microeconomic Impacts of COVID-19 Pandemic: A Conceptual Review," MPRA Paper 110440, University Library of Munich, Germany, revised 2021.
    12. Törmä, Hannu & Kujala, Susanna & Kinnunen, Jouko, 2015. "The employment and population impacts of the boom and bust of Talvivaara mine in the context of severe environmental accidents – A CGE evaluation," Resources Policy, Elsevier, vol. 46(P2), pages 127-138.

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    More about this item

    Keywords

    Platinum mining strike; computable general equilibrium; UPGEM;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation

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