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South Africa coal miners start massive strike

South Africa coal miners start massive strike
By Reuters
Mon 25 July 2011, 15:40 CAT

ABOUT 150,000 South African coal workers went on strike on Monday seeking 14 percent wage increases, but power utility Eskom said the stoppage would not have an immediate impact on plants providing electricity to Africa's largest economy. Hundreds of thousands of workers across the country have downed tools in recent weeks, or are threatening to do so, seeking raises double or triple the 5 percent inflation rate in the mid-year bargaining session known locally as "strike season".

State-run Eskom , which relies on coal for most of its power generation, said the latest strike would only have an impact if it became protracted.

"We've got on average 38 days of coal stockpiles at the power stations," spokesman Tony Stott said.

"If the strikes goes for a long time and demand goes up due to cold weather, it would put the system under severe strain."

Lesiba Seshoka, spokesman for the powerful National Union of Mineworkers (NUM), said employers have offered pay rises of 7 to 8.5 percent. The union said there were currently no plans for fresh talks.

Eskom has been under pressure to build new plants to avoid a repeat of the power shortage that brought the economy to its knees in 2008, forcing mines and other industries to shut down for days and costing the country billions of dollars in lost output.

Eskom plans steep increases in electricity prices to pay for much-needed new power stations, adding to inflationary pressures and taking more money out of middle-class paychecks.

The Chamber of Mines is negotiating on behalf of several coal mining groups, including Anglo Thermal Coal SA, Exxaro, Optimum Coal and Xstrata Coal.

Eskom is facing political pressure to settle with workers. The country's ruling African National Congress is allied with organised labour and wants to placate its millions of voters.

Employers over the past two years have struck wage deals averaging about 8 percent, a survey said, with many firms seeing the above-inflation settlements as a necessary cost of doing business in South Africa. They have also slashed jobs over the period to make up for the higher personnel costs.

Strikes typically last a few weeks, slowing production but not causing any major harm to the economy.
Eskom is also facing strike threats from NUM members among its own workforce seeking a 16 percent wage increase.

In another dispute, the NUM is also seeking a 14 percent wage raise from gold mining companies. The chamber of mines says AngloGold and Gold Fields have offered 5 to 5.5 percent while Harmony and junior minor Rand Uranium has offered 4.8 to 5.3 percent.

The union held talks with gold mining companies on Monday.

Economists have said wage settlements well above inflation hurt the country's competitiveness and long-term outlook by driving up the costs for a labour force already more expensive than those in other emerging markets and far less efficient.

There have also been worries work stoppages could hit the country's platinum sector. South Africa is the world's biggest producer of the precious metal used in jewelry and catalytic converters for cars.
In a separate strike stretching into its third week, the union that represents about 70,000 fuel, paper and chemical workers said talks with employers were deadlocked.

The CEPPWAWU union on Friday lowered its pay demand to a 9.5 percent increase from 13 percent. Employers have offered 8 percent.

Labels: COAL, ESCOM, MINING, SOUTH AFRICA, STRIKE

posted by MrK @ 5:52 PM