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Minister: Gold strike will hurt economy

Pretoria -  A protracted strike in the gold industry would harm Africa's largest economy and the government is ready to intervene to bring parties together, Mines Minister Susan Shabangu said on Tuesday.

Gold miners were set to strike for higher pay from Tuesday, after talks between unions and companies broke down last week. A wave of strikes sweeping the economy has sent the rand to four year lows and raised worries of slowing growth.

With stoppages in the vehicle industry and the construction sector already sapping the struggling economy, shutting gold mines could cripple an industry that has produced a third of the world's bullion but is now in rapid decline.

"If indeed we are going to have a protracted industrial action, it will impact negatively on the economy," Shabangu told Reuters at a presidential briefing in Pretoria.

"If there is a need for government to intervene, we will engage the parties," she said.

Economists say the local economy, already suffering from slow growth and high unemployment, can ill afford the lost output - estimated at more than $35m a day - from an industry shutdown in gold.

Labour and management are poles apart on wages, with the dominant National Union of Mineworkers (NUM) seeking 60% pay hikes for entry-level miners and its more hardline rival, the Association of Mineworkers and Construction Union (Amcu) pushing for 150% raises.

Companies say they cannot afford this in the face of soaring costs and depressed prices. The president of the Chamber of Mines, which represents the industry, has warned unions against building up workers' hopes.

"We are really very concerned," Shabangu said, adding that the sides in the dispute needed to "find each other soon".

"We are urging them to consider the current situation," she added.

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