South Africa - Striking Miners Reject Lonmin Pay Offer

Wildcat strikers at Lonmin's Marikana mine rejected a pay offer on Friday, dimming prospects of ending five weeks of industrial action that has swept through South Africa's platinum sector and laid bare the power struggle in the ruling ANC.

Workers camped on a rocky outcrop at the mine, where police shot dead 34 protesters last month, dismissed the offer as way below the 12,500 rand a month they have been demanding.

"We are not interested," striker representative Molifi Phele said as hundreds of stick-waving demonstrators chanted and danced around him on the sun-bleached grass in the heart of the 'platinum belt', 100km (60 miles) northwest of Johannesburg.

"What he is offering cannot buy you anything. All we want is 12,500."

The August 16 "Marikana Massacre" has poisoned industrial relations across the mines and had the potential to be "extremely damaging" to Africa's biggest economy, Finance Minister Pravin Gordhan said, in a shift of tone from last week.

The rand fell three percent on Wednesday as the unrest engulfed Anglo American Platinum, the world's biggest producer, and ripples have started to reach the bond market amid concerns Pretoria might resort to throwing money at the problem.

"Things could get really ugly," said Manik Narain, an emerging market strategist at UBS in London. "There is a risk the government will respond to the unrest with fiscal stimulus, which will not go down well with rating agencies."

The mine shootings, the bloodiest security incident since the end of apartheid in 1994, have also made it hard for the police to use force to disperse crowds of strikers, most of whom are armed with sticks, spears and machetes.

At a news conference called by six cabinet heavyweights, Justice Minister Jeff Radebe announced a crackdown on "illegal gatherings" and the carrying of weapons, but failed to say how the police would put it into effect.

"All those who break the law, regardless of who they are, will be dealt with with the full might of the law," Radebe said.

Police minister Nathi Mthethwa also insisted the authorities "cannot allow this to go on" but stopped short of declaring any localised state of emergency or calling in the army to back up stretched police.