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South Africa Faces Prolonged Strikes as Unions Reject New Offers

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Aug. 29 (Bloomberg) -- South African labor unions rejected revised wage offers from employers in the construction, carmaking and gold mining industries as strike action threatened to spread to gas stations and car component makers.

The National Union of Mineworkers, which is leading a walkout of about 90,000 construction workers, turned down a proposal from the South African Federation of Civil Engineering Contractors, spokesman Lesiba Seshoka said today. About 30,000 employees in the automotive industry refused to accept a three-year deal from carmakers including Toyota Motor Corp. and Bayerische Motoren Werke AG, according to the National Union of Metal Workers of South Africa. Gold companies plan to lock out employees after unions rejected a revised offer.

About 335,000 workers could be on strike by next week as labor protests spread across Africa’s biggest economy. Gross domestic product rose an annualized 3 percent in the second quarter, a slower pace than the median estimate of economists surveyed by Bloomberg. Inflation accelerated to 6.3 percent in July, the highest in 15 months.

The NUM turned down an annual wage increase of as much as 10 percent as part of a three-year deal from the builders, according to Seshoka. The offer “only equals a 400-rand increase a month,” he said. “We are asking for 14 percent and improved benefits. The strike is still on.”

‘Far Apart’

Industrial action cost South Africa’s biggest builder Murray & Roberts Holdings Ltd. about 350 million rand ($33.8 million) in the year through June, Chief Executive Officer Henry Laas said in an interview in Johannesburg today. “The parties are quite far apart,” he said. “It’s going to be difficult to close the gap in a short period of time.”

While the NUM and the construction employers’ federation are to meet tomorrow for a new round of talks, carworkers are preparing a fresh pay demand. Employees at seven plants have been on strike since Aug. 19, costing manufacturers as much as 700 million rand a day. The industry accounts for about 7 percent of South Africa’s gross domestic product, according to the Department of Trade and Industry.

“What has been offered isn’t even close to addressing apartheid wage disparities,” Numsa spokesman Castro Ngobese said in a phone interview today.

The strike at carmakers’ plants will spread to about 72,000 more workers at gas stations, dealerships and components manufacturers such as Metair Investments Ltd. They will be downing tools on Sept. 2 after a wage impasse between Numsa, the Fuel Retailers Association and Retail Motor Industry Organization, according to an Aug. 27 statement from the union.

‘Visibility Difficult’

Metair is a supplier of parts including batteries and air conditioners to carmakers. A strike lasting more than four weeks will impact South African sales for the second half of its fiscal year, Managing Director Theo Loock said in an interview today. “Visibility is very difficult because of the strikes,” he said.

South Africa’s gold miners, including AngloGold Ashanti Ltd., the world’s third-biggest producer of the metal, are considering a lockout of workers and unions as they decide whether to strike.

The Chamber of Mines gave unions until noon today to accept its final offer to increase wages of some miner categories by 6.5 percent, Elize Strydom, the organization’s chief negotiator, said by phone. The National Union of Mineworkers, which represents 64 percent of employees at the seven gold companies, rejected the offer, Charmane Russell, a spokeswoman for the chamber, said in an e-mail.

Demanding Increase

Entry-level underground miners earn 5,000 rand a month before housing allowances and bonuses, according to the chamber. The NUM wants this to rise to 8,000 rand. The Association of Mineworkers and Construction Union, the second-biggest gold-labor group, is demanding an increase to 12,500 rand a month. Solidarity wants an 8.3 percent raise.

A gold-mining strike could result in 142,000 people stopping work. The NUM “might know something” tomorrow on whether it will go on strike, Seshoka said.

To contact the reporters on this story: Kamlesh Bhuckory in Johannesburg at kbhuckory@bloomberg.net; Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net

To contact the editors responsible for this story: Simon Thiel at sthiel1@bloomberg.net; John Viljoen at jviljoen@bloomberg.net

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