UPDATE 2-SAfrica transport strike hits more industries

* Some 59 pct of Transnet’s staff involved in labour action

* Unions to press for 15 pct pay rise

(Recasts, adds industry, economists)

By Agnieszka Flak and Shapi Shacinda

JOHANNESBURG, May 13 (BestGrowthStock) – A national transport strike
in South Africa took its toll on the country’s exports of metals
and fruit as unions planned to meet with logistics group
Transnet [TRAN.UL] on Friday to try resolve the pay dispute.

The strike at Transnet, now in its fourth day, widened on
Wednesday after a second union joined the stoppage, the latest
public protest ahead of next month’s soccer World Cup
tournament, being held in Africa for the first time.

Nearly two-thirds of Transnet’s 54,000-strong workforce
joined the labour action, bringing the country’s rail and port
operations to a halt and threatening deliveries of metals, fruit
and wine to customers in Europe and Asia.

Pradeep Maharaj, Transnet’s HR Executive, said the container
sector in ports and rail operations were hardest hit so far.

“However, we are continuing to meet our critical
requirements in terms of exports through the ports and movement
of bulk commodities,” he told Reuters on Thursday.

Transnet does not operate passenger services and is not a
big transporter of coal to power plants, but a prolonged strike
could affect imports, internal fuel supplies and exports of
fresh fruit, grains, iron ore and coal.

“We have enough store capacity to take fruit until the
weekend, but if it goes past the weekend, we start running into
capacity problems,” said Justin Chadwick, Chief Executive of the
Citrus Growers Association.

He said the country’s citrus industry, worth an annual 4.5
billion rand ($600 million) and second-largest producer after
Spain, is currently storing oranges and grapefruits destined for
Europe and Middle East in fridges, but space is limited.

The National Chamber of Milling said most of the country’s
maize was transported by road, but wheat imports could be hit.

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 also said they were running out of space and would
need to curtail production if they cannot ship products to
ports. [ID:nLDE64B1GM]

South Africa is one of the world’s biggest coal exporters,
mainly to power stations in Europe and Asia.

Global miner Xstrata (XTA.L: ) on Wednesday declared a force
majeure, halting shipment of ferrochrome, a key ingredient in
stainless steel, and chrome ore. Samancor, the world’s
2nd-biggest producer, did the same, traders said.[ID:nLDE64B2B7]

FIFTEEN PERCENT

The United Transport and Allied Trade Union (Utatu) and the
South African Transport and Allied Workers Union (Satawu)
represent 85 percent of Transnet’s workforce of 54,000 people.

Utatu said it would stick to its 15 percent pay rise demand
when talks reopen, above the 11 percent offered by Transnet,
fuelling criticism among analysts who say pay rises triple the
inflation rate of 5.1 percent would hamper South Africa’s
recovery from its first recession in 17 years.

“This strike is a show of power … we don’t see them
wanting to budge for less than 15 percent and that’s
outrageous,” said Freddie Mitchell, an economist at Efficient
Group.

Economists said it was too early to put a figure on losses
from the strike, especially given built up stocks ahead of the
strike, but said it could be in the millions of rand per day.

Central Bank Governor Gill Marcus said on Thursday high wage
settlements not matched by productivity increases could pose a
risk to the country’s inflation outlook.[ID:nLDE64C1A8]

Utatu and Satawu met the mediator from the Commission for
Conciliation, Mediation and Arbitration on Thursday, and are due
to meet with the mediator and Transnet on Friday.

Transnet said it was willing to discuss options other than a
further wage raise to end the strike, but stressed that going
beyond 11 percent was unaffordable and unsustainable.

In a separate move, Satawu said it may strike over pay on
Monday at the passenger transport service Metrorail, with Utatu
expected to join, which could affect millions of commuters.

Investing

(Editing by Giles Elgood)

UPDATE 2-SAfrica transport strike hits more industries