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Coal wage strike starts with no dialogue planned

Strike won’t impact electricity generation at this stage, Eskom says.

The largest labor union at South Africa’s biggest coal producers said no meetings are planned with the companies after a wage strike started on Sunday night.

“Our members have downed tools and supported our call for a strike,” Livhuwani Mammburu, a spokesman for the National Union of Mineworkers, which represents about 30 000 staff in the sector, said by phone on Monday. No meetings are scheduled with producers, including Anglo American, Glencore and Exxaro Resources, he said.

The NUM last week rejected the companies’ latest offer to raise basic salaries for the lowest-paid worker categories by a range of 5.5% to 8.5%. The union wants increases of 12% to 13% for a coal-mining industry that directly employs almost 90 000 people and paid about R19 billion ($1.39 billion) in wages in 2014.

The walkout is “being felt,” Charmane Russell, a spokeswoman at the Chamber of Mines, which negotiates on behalf of producers, said by phone. The major companies have offered 7% to 8.5% and the smaller ones 5.5% increases, she said.

“We will continue to engage with the unions with the aim” of getting them to accept “the offer on the table,” said Mzila Mthenjane, Exxaro’s executive head of strategy.

Significant costs

Wage talks in South Africa’s gold and coal industry have continued for months as producers face declining prices for the minerals and competition between unions grows. The NUM signed a wage agreement on Friday with gold mines, where it is also the largest labor group, while the Association of Mineworkers and Construction Union, the second-biggest union in the industry, rejected the deal.

Because labour relations are relatively stable and mines are more mechanised in the coal sector, the labour action “is unlikely to last more than two weeks, and may well be resolved within a matter of days,” Mark Rosenberg, an Africa director at Eurasia Group, said in a note October 1. “If the strike does last longer than expected, the economic costs will be significant.”

Eskom, the state-owned utility that supplies about 95% of South Africa’s power, primarily from coal, said most power stations have a 30-day stockpile of the fuel. “We thus do not anticipate that the strike will have an impact on our ability to generate electricity at this stage,” the company said in an e-mail.

©2015 Bloomberg News

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Psst – don’t tell the strikers that Eskom has a 30 day stockpile. If they know this, you can count on another strike in a month’s time. After all, it’s in populist scheme of making South Africa ungovernable. No electricity, no water, no food, no transport. They can then sit under the marula tree all day – paradise!

End of comments.

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