UPDATE 4-Eskom strike threat hits SAfrica's rand

* Prolonged strike would hurt economy

* Zuma says strikes not unusual

* Miners seek Eskom meeting

* Eskom says confident strike will be averted (Adds Eskom comments)

By James Macharia

JOHANNESBURG, Aug 6 (Reuters) - South Africa's biggest union said on Thursday it would organise a march to press power utility Eskom for better pay, and its threats of possible strike action helped push the rand currency sharply lower.

The threat of a power shutdown in Africa's biggest economy helped drive up prices of platinum XPT= and palladium XPD= due to fears output could be hit, and deepened concerns about damage to the economy.

South Africa is the world biggest platinum producer and also a major gold supplier.

Renewed strike threats helped push the rand ZAR=D3 to a three-week low as investors fretted about the impact on an economy struggling with its first recession in 17 years.

The currency fell as much as 2.46 percent, its biggest one-day decline since May 11, according to Reuters data.

President Jacob Zuma seemed more concerned over the global economic crisis than strikes, saying they hurt all developed economies and South Africa was used to them.

But a drawn-out strike could hit shares and send precious metal prices rocketing as happened in January last year when South Africa suffered a near-collapse of its power grid, analysts said.

"We are planning a big march for Thursday next week, we will march on Eskom's headquarters," Lesiba Seshoka, spokesman for South Africa' biggest union, the National Union of Mineworkers (NUM) said. NUM has threatened to strike at Eskom.

The National Union of Metal Workers of South Africa (NUMSA), which has some 5,000 workers at Eskom also said it would strike.

"We are going to pull the plug on Eskom," its spokesman Castro Ngobese said.

ESKOM CONFIDENT

Eskom said it was confident that a strike would be averted but if labour action went ahead, the utility had contingency plans in place.

"At each of Eskom's power stations we do have contingency plans which would be put into place in the event of a strike or any other emergency, but we don't foresee strike action," Eskom spokesman Andrew Etzinger told Reuters.

"We are aware of the possibility of a strike, but we are confident that the wage negotiations will conclude satisfactorily for all parties".

He declined to say what contingency measures Eskom had in place, citing national security, or whether the utility would offer a higher increase to workers to avert a strike.

Eskom generates 95 percent of South Africa's electricity and 45 percent of Africa's. Blackouts early last year temporarily crippled mine output and dented economic growth.

Several of South Africa's mining groups said said they planned to meet Eskom soon to discuss the threatened strike.

Another strike could hurt investor sentiment after a recent wave of industrial action in South Africa that led to above-inflation settlements.

A power strike could be a challenge to Zuma's authority as he tries to lead South Africa through the recession and defuse anger in poor townships.

"If it's a drawn-out strike of weeks then it is a huge problem, but if it is a couple of days then we can somehow live with it," said Johan de Kock, a Cape Town-based head of equity research at Metropolitan Asset Managers.

"Eskom must have some contingency or emergency plans to cope with such situations for a few days, but if it's a long strike it would have a huge impact, metal prices could spike as it happened when we had a huge power crisis last year."

Seshoka said the NUM, which represents about 16,000 workers at Eskom, had learnt the power company was seeking a court order to ban the strike. But that would not stop NUM members taking action, he said. Eskom's Etzinger denied that the company had applied for a court order.

Zuma said strikes were not unusual this time of the year.

"You should have known by now that every year around this time, there is negotiation season. And in the majority of cases strikes emerge out of the disagreement and deadlocking," Zuma told a news conference.

"If it happens all the time, I don't think, therefore, we should be surprised about it and try to make it look strange. It's actually a common occurrence every year.

Under South African labour law, Eskom is classified as an essential service, prohibiting a large majority of its staff from striking. But the union has said it could defy the law because of the urgency of its members' demands.

The Solidarity union, which represents about 8,000 workers at Eskom, said a prolonged strike could affect power supply. (Additional reporting by Alison Raymond and Peroshni Govender; Writing by Michael Georgy; Editing by Marius Bosch and Richard Williams)