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SA faces strike wave as labour strife widens

Johannesburg - South Africa faced a strike wave across leading sectors of the economy on Thursday and the labour unrest threatened to hit its struggling gold industry, already squeezed by rising costs and falling bullion prices.

Despite appeals from President Jacob Zuma and other government leaders for peaceful wage negotiations, the National Union of Mineworkers (NUM) said its members in the construction sector would down tools from Monday.

NUM was also consulting its membership on a strike in the gold industry, which could start next week following an impasse in salary talks with mining companies.

Although the country has fallen in the world ranking of gold producers, gold remains its main mineral export and the industrial action, including a vehicle industry strike already underway, will inflict more damage on the struggling economy.

Violent wildcat strikes in the mining industry last year cost billions of rand in lost output, dented economic growth and led to damaging downgrades of South Africa's credit rating.

More than 50 people died in protests at the mines.

The strife has also battered the rand, which dropped to a new four-year low against the dollar early on Thursday.

"We trust that working together, all parties will co-operate and see value in promoting lasting labour peace in our crucial mining sector," Zuma said on Thursday.

He was addressing a gathering of the 85 000-member Sactwu textile workers' union, which is also considering a strike.

Wage demands

Increasing wage claims and militancy among workers struggling to make ends meet as their living costs rise, are a major problem for the government before elections scheduled for next year.

It faces accusations that since apartheid ended in 1994, the ANC has paid more attention to the interests of a wealthy elite than to the country's workers, unemployed and poor.

Trade Minister Rob Davies recognised "a deteriorating labour relations environment, rooted in deep inequalities, rooted in insecurities arising from changes in the fortunes of the mining industry, insufficient career pathing and high levels of worker indebtedness.

"All of this, we think, has created a situation where there are very high wage demands and a loss of patience with more moderate negotiating frameworks," he said in Cape Town.

Kevin Lings, chief economist at Stanlib, said more strikes would frighten away potential investors and increase the cost of international borrowing for South Africa, if they led to further credit downgrades.

"Overall, it has already done South Africa quite significant damage and obviously ongoing strike action will continue to undermine the ability of South Africa to prosper," he told Reuters.

NUM represents about 64% of the roughly 140 000 miners in the South African gold industry, where major operators include AngloGold Ashanti, Gold Fields, Harmony and Sibanye Gold.

The opposing sides in the gold sector remain far apart after the weeks of talks, with virtually no narrowing of the gap between the unions and employers, whose latest offer was a 6% wage increase for some categories.

NUM, which is seeking a 60% increase, walked out of the talks along with a smaller union Uasa and applied for what is known as a "certificate of non-resolution" from the government mediator, which was granted. This effectively allows them to strike.

Manufacturing

"The earliest we will issue companies with notice of the strike is Monday next week," said NUM spokesperson Lesiba Seshoka.

With such notice normally being given 48 hours before any action, this meant a stoppage in the gold industry could start on Wednesday.

NUM's more hardline rival, the Association of Mineworkers and Construction Union (Amcu) which represents about 17% of the gold labour force, has submitted wage demands as high as 150%, but is still engaged in negotiations.

A membership turf war between NUM and Amcu was behind last year's mine violence.

The stoppage in the construction sector which has already been announced would affect major companies such as Wilson Bayly Holmes Ovcon, Aveng and Group Five.

The country's faltering economy is already losing an estimated R618m a day to a strike by 30 000 workers in the car manufacturing sector that accounts for 6% of gross domestic product.

This strike entered its fourth day on Thursday and has affected global firms operating in South Africa, including Toyota, Ford and General Motors.

In the gold sector, companies are being squeezed between growing worker militancy which has pushed up wage costs and falling bullion prices.

Labour accounts for over 50% of costs and gold's spot price is 30% lower than the record peak of over $1 920 an ounce it reached almost two years ago.

The industry says about half of the country's shafts are losing money at these levels.


 
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