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

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  • Bohlmann, H.R., Dixon, P.B., Rimmer, M.T. and Van Heerden, J.H.

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 confidence 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

  • Bohlmann, H.R., Dixon, P.B., Rimmer, M.T. and Van Heerden, J.H., 2014. "The Impact of the 2014 Platinum Mining Strike in South Africa: An Economy-Wide Analysis," Working Papers 478, Economic Research Southern Africa.
  • Handle: RePEc:rza:wpaper:478
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    References listed on IDEAS

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    1. 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.
    2. 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, Elsevier.
    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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    Cited by:

    1. 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.
    2. Leone Walters & Heinrich R. Bohlmann & Matthew W. Clance, 2016. "The Impact of the COMESA-EAC-SADC Tripartite Free Trade Agreement on the South African Economy," Working Papers 201669, University of Pretoria, Department of Economics.
    3. Jessica A. Bohlmann & Heinrich R. Bohlmann & Roula Inglesi-Lotz, 2015. "An Economy-Wide Evaluation of New Power Generation in South Africa: The Case of Kusile and Medupi," Working Papers 201540, University of Pretoria, Department of Economics.

    More about this item

    Keywords

    Platinum mining strike; computable general equilibrium; UPGEM;

    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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