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Transport strike takes effect

Durban “’ one of the
ports paralysed by
the transport strike
Johannesburg, South Africa — MININGREVIEW.COM — 13 May 2010 – The nationwide, indefinite transport strike has paralysed South African railways and ports choking rail and port shipments of iron ore and chrome, and is hurting mining groups Xstrata, Samancor and Kumba Iron Ore, as well as top steel producer ArcelorMittal South Africa.

The four-day-old strike at state logistics group Transnet widened yesterday after the company’s biggest union joined in what is the latest public protest ahead of next month’s World Cup soccer tournament in South Africa.

“Ports at Durban, Richards Bay, Saldanha and Cape Town are severely affected by the strike, with a backlog of container shipments building up at each,” Transnet chief executive for human resources Pradeep Maharaj told Bloomberg News in a telephone interview here.

About 40 000 of the utility’s 54 000 workers are on strike, according to the United Transport & Allied Workers Union (Utawu).

Xstrata, the world’s No.1 exporter of thermal coal, has declared force majeure on shipments of ferrochrome and chrome ore because of the strike, while Anglo American Plc’s Kumba Iron Ore Limited admits it’s been “quite severely” affected. Reuters reports that Samancor Limited has also declared force majeure on exports of ferrochrome.

ArcelorMittal South Africa, the country’s largest steel producer, says deliveries of iron ore and coking coal to its mills have been “dramatically” affected by the strike. The steelmaker is relying on its stocks of the materials, “which are reducing,” spokesman Julian Gwillim said from here.

The approximately 800km iron-ore rail line is “virtually at a standstill,” according to Utatu general secretary Chris de Vos.

Richards Bay Port “’ South Africa’s biggest bulk export facility “’ has been partially closed by the strike, said two port agents. The multi-purpose terminal, which handles general cargo including ferrochrome and other commodities, has been halted and loading at the dry bulk terminal has been hindered, they added.

The unions are demanding a 15% wage increase, compared to Transnet’s offer of 11%, which is twice the country’s inflation rate.

While Transnet is concerned about the impact of the strike on both the company and the economy, agreeing to union demands would result in it having to raise prices or even cut jobs, it said in an e-mailed copy of an open letter to the unions.