Mon Jul 25, 2011
* Eskom sees no immediate impact from coal strike
* Above inflation wage deals hurting economy, analysts
By Agnieszka Flak and Olivia Kumwenda
JOHANNESBURG, July 25 - Tens of thousands of South African coal workers went on strike on Monday seeking inflation-busting 14 percent wage increases, but power utility Eskom said the
stoppage would not have an immediate impact on plants providing electricity to Africa's largest economy.
Hundreds of thousands of workers across the country have downed tools in recent weeks, or are threatening to do so, seeking raises double or triple the 5 percent inflation rate in the mid-year bargaining session known locally as "strike season".
State-run Eskom , which relies on coal for most of its power generation, said the latest strike would only have an impact if it became protracted.
"We've got on average 38 days of coal stockpiles at the power stations," spokesman Tony Stott said.
Lesiba Seshoka, spokesman for the powerful National Union of Mineworkers (NUM), said about 150,000 were on strike and employers have offered pay rises of 7 to 8.5 percent.
The chamber of mines said there are about 30,000 unionised workers in the coal sector and it was unclear how many were striking.
Employers over the past two years have struck wage deals averaging about 8 percent with many firms seeing the above-inflation settlements as a necessary cost of doing business in South Africa. They have also slashed jobs over the period to make up for the higher personnel costs.
Independent coal analyst Xavier Prevost said: "If there is no compromise and they continue like this, it's going to be serious and the damage to the economy will be big."
"If we don't produce coal, the first to be affected will be exports. Our (export) stockpiles will probably not last longer than 15 days".
The Richards Bay Coal Terminal, which ships most of South Africa's coal abroad, said stocks stood at a healthy 2.99 million tonnes at the end of June.
Eskom has been under pressure to build new plants to avoid a repeat of the power shortage that brought the economy to its knees in 2008, forcing mines to shut down for days and costing
the country billions of dollars in lost output.
It plans steep increases in electricity prices to pay for much-needed new power stations, adding to inflationary pressures and taking more money out of middle-class paychecks.
But Eskom is facing political pressure to settle with workers. The country's ruling African National Congress is allied with organised labour and wants to placate its millions of voters.
The Chamber of Mines is negotiating on behalf of several coal mining groups, including Anglo Thermal Coal SA , Exxaro , Optimum Coal and Xstrata Coal.
Read more
Why Coal Prices Will Soar in the Coming Years
Lontoh Coal Limited of South Africa has planned to open up China’s market
Coal prices area at US$ 120 a tonne
Mozambi Coal to acquire Mozambican coal concession
Newcastle steam coal price rises by 1pct
S.Africa's June coal exports rise to 4.78 mln T
Coal of Africa shares up almost 20%
* Eskom sees no immediate impact from coal strike
* Above inflation wage deals hurting economy, analysts
By Agnieszka Flak and Olivia Kumwenda
JOHANNESBURG, July 25 - Tens of thousands of South African coal workers went on strike on Monday seeking inflation-busting 14 percent wage increases, but power utility Eskom said the
stoppage would not have an immediate impact on plants providing electricity to Africa's largest economy.
Hundreds of thousands of workers across the country have downed tools in recent weeks, or are threatening to do so, seeking raises double or triple the 5 percent inflation rate in the mid-year bargaining session known locally as "strike season".
State-run Eskom , which relies on coal for most of its power generation, said the latest strike would only have an impact if it became protracted.
"We've got on average 38 days of coal stockpiles at the power stations," spokesman Tony Stott said.
Lesiba Seshoka, spokesman for the powerful National Union of Mineworkers (NUM), said about 150,000 were on strike and employers have offered pay rises of 7 to 8.5 percent.
The chamber of mines said there are about 30,000 unionised workers in the coal sector and it was unclear how many were striking.
Employers over the past two years have struck wage deals averaging about 8 percent with many firms seeing the above-inflation settlements as a necessary cost of doing business in South Africa. They have also slashed jobs over the period to make up for the higher personnel costs.
Independent coal analyst Xavier Prevost said: "If there is no compromise and they continue like this, it's going to be serious and the damage to the economy will be big."
"If we don't produce coal, the first to be affected will be exports. Our (export) stockpiles will probably not last longer than 15 days".
The Richards Bay Coal Terminal, which ships most of South Africa's coal abroad, said stocks stood at a healthy 2.99 million tonnes at the end of June.
Eskom has been under pressure to build new plants to avoid a repeat of the power shortage that brought the economy to its knees in 2008, forcing mines to shut down for days and costing
the country billions of dollars in lost output.
It plans steep increases in electricity prices to pay for much-needed new power stations, adding to inflationary pressures and taking more money out of middle-class paychecks.
But Eskom is facing political pressure to settle with workers. The country's ruling African National Congress is allied with organised labour and wants to placate its millions of voters.
The Chamber of Mines is negotiating on behalf of several coal mining groups, including Anglo Thermal Coal SA , Exxaro , Optimum Coal and Xstrata Coal.
Read more
Why Coal Prices Will Soar in the Coming Years
Lontoh Coal Limited of South Africa has planned to open up China’s market
Coal prices area at US$ 120 a tonne
Mozambi Coal to acquire Mozambican coal concession
Newcastle steam coal price rises by 1pct
S.Africa's June coal exports rise to 4.78 mln T
Coal of Africa shares up almost 20%
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