SAfrica transport strike seen widening, talks fail

* Transport strike enters second week

* Unions lower pay rise demand to 13 pct; inflation 5.1 pct

JOHANNESBURG, May 17 (BestGrowthStock) – Talks between striking
South African transport workers and logistics group Transnet
[TRAN.UL] have failed to end a dispute, threatening to widen
action that has crippled the country’s rail and port operations.

The strike, in its second week, has hit exports of metals,
fruit and wine to customers in Europe and Asia after nearly
two-thirds of Transnet’s 54,000-strong workforce joined in.

“The Transnet strike is set to intensify with no resolution
in sight. Management effectively walked away from any negotiated
settlement (last night) after stating an unwillingness to budge
on any item of money substance,” the Satawu and Utatu unions
said in a statement on Monday.

The two unions also began a strike at South Africa’s
Passenger Rail Agency (Prasa) on Monday, halting all commuter
rail operations and affecting millions of passengers.

The strikes are the latest protests in the country ahead of
next month’s soccer World Cup, which is being held in Africa for
the first time. There are concerns that the strike could affect
imports of equipment for the event.

The South African Transport and Allied Workers Union
(Satawu) and the United Transport and Allied Trade Union (Utatu)
represent some 85 percent of Transnet’s staff.

The unions have been in mediated talks with Transnet over
the weekend. The unions said they had lowered their wage rise
request to 13 percent from 15 percent, closer to Transnet’s
offer of 11 percent, but still no agreement could be reached.

Analysts and the central bank have criticised unions, saying
that pay rises well above the 5.1 percent inflation rate would
slow South Africa’s economic recovery. The lowest paid worker at
Transnet earns $470 a month, a union official said.

“Our members will remain steadfast in the withholding of
their labour until a settlement is reached,” the unions said.

Anglo American Plc’s (AAL.L: ) iron ore unit in South Africa
declared a force majeure on shipments last week, joining other
global metal exporters such as Xstrata (XTA.L: ), which said it
could not supply ferrochrome to its customers. [ID:nLDE64B2B7]

The unions said 60 percent of Transnet’s port, rail and fuel
operations were disrupted, with no imported goods being
offloaded.

Transnet does not operate passenger services and does not
transport much coal to power plants, however a prolonged strike
may hit imports, fuel supplies and exports of iron ore and coal.

The impact on coal and iron ore exports has been limited due
to built-up stocks at ports, but the firms have said they would
start feeling the crunch if the strike goes beyond this week.
Miners said they were running out of storage space and would
need to cut production if they cannot ship products to ports.

Producers of fruit said they were already running out of
storage for produce they could not ship and wine makers said
exports had stopped. [ID:nLDE64C15O][ID:nLDE64D13V]

The unions called on other trade union federations to
escalate their support for the strike.

Stock Investing

(Reporting by Agnieszka Flak)

SAfrica transport strike seen widening, talks fail