SAfrica transport strike drags on, no deal reached

Sat May 15, 2010 8:49am EDT

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* Strike drags on into sixth day

* Wage negotiations to resume on Sunday

JOHANNESBURG, May 15 (Reuters) - Talks between striking South African transport workers and logistics group Transnet [TRAN.UL] have failed to reach agreement on a pay deal, prolonging action that is hitting the economy hard.

Negotiations ended at midnight on Friday without a deal but will resume on Sunday, said Jane Barrett of the South African Transport and Allied Workers Union.

She refused to disclose any details of the discussions between Transnet, Satawu and Utatu, another transport union, saying they were "very sensitive and difficult".

Now in its sixth day, the strike has paralysed South Africa's port and rail operations and hit exports of metals, fruit and wine to Europe and Asia after nearly two-thirds of Transnet's 54,000-strong workforce downed tools.

It is the latest protest in the country ahead of next month's soccer World Cup, which is being held in Africa for the first time. There were concerns that the strike could impact imports of equipment for the soccer event starting next month.

The unions want a 15 percent pay rise, above the 11 percent offered by Transnet, fuelling criticism among analysts and the central bank who say a pay rise well above the 5.1 inflation rate would slow South Africa's economic recovery.

Anglo American Plc's (AAL.L) iron ore unit in South Africa has declared a force majeure on shipments, joining other global metal exporters such as Xstrata XTA.L, which said it could not supply ferrochrome to its customers. [ID:nLDE64B2B7]

The unions said 60 percent of Transnet's port, rail and fuel operations were disrupted, with no import goods being offloaded. (Reporting by Ed Cropley; Editing by Jon Boyle)

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