Johannesburg, South Africa — MININGREVIEW.COM — 18 May 2010 – The South African rail and port strike situation has deteriorated, and Reuters reports that it is threatening to bring Africa’s biggest economy to a standstill as it moves into its second week.
Weekend talks to end the strike over pay at state-owned logistics group Transnet failed, and both the company and unions said no new negotiations had been planned.
The strike has dented exports of metals. Some suppliers said they could not supply ferrochrome to their customers. The supply of coal to power plants has only been slightly affected, however a prolonged strike may hit exports of iron ore and coal once stocks are used up. Miners said they were running out of storage space and would need to cut production if they could not ship products to ports.
The strike is the latest protest in the country ahead of next month’s soccer World Cup, and FIFA said imports of some equipment for the event had been affected.
The United Transport and Allied Trade Union (Utatu), and the South African Transport and Allied Workers Union (Satawu), have asked union federations Fedusa and Cosatu to join the strike. Yesterday they also began a strike at South Africa’s Passenger Rail Agency (Prasa), halting all commuter rail operations.
The unions want at least a 12% pay rise, while Transnet says it cannot afford more than 11 %. The two unions represent some 85% of Transnet’s staff, and their action has paralysed two-thirds of the company’s services. However some workers returned to work yesterday, saying they could not afford to lose more income.
Reuters reports that economists could not put an exact figure on losses from the strike, especially since many companies had anticipated industrial action and build up their inventories, but some estimated the loss in the hundreds of millions of rand.
“The effect almost day-by-day becomes exponentially bigger, and then we quickly are getting into billions of rand. A few more days and this will be massively disruptive to the economy," said Stanlib chief economist Kevin Lings.