UPDATE 4-Rubber bullets fired at S.African mine strikers, several hurt

Tue May 21, 2013 10:40am EDT

* Miners hospitalised after clash with security guards

* Auto sector union demands 20 percent wage rise

* Currency tumbles; rate cut hopes dashed

By Wendell Roelf

CAPE TOWN, May 21 (Reuters) - Ten striking South African miners were taken to hospital on Tuesday after being hit by rubber bullets, police said, as labour strife spread ahead of mid-year pay negotiations.

As well as the violence at a chromium mine, the National Union of Metal Workers of South Africa (NUMSA) said it wanted a 20 percent industry-wide salary rise after a two-day stoppage at a Mercedes-Benz plant in East London.

"If our demands are not met we will have no option but to go to the streets," union treasurer Mphumzi Maqungo told Reuters. The union, which has 230,000 members, issued the same demand to state power utility Eskom.

The events underscored the fragility of labour relations in Africa's biggest economy since last year's mine unrest in which at least 50 people were killed - including 34 shot dead by police at Lonmin's Marikana platinum mine.

The rand plunged beyond 9.50 to the dollar for the first time since early 2009, extending its two-week slide, after police said security guards had fired rubber bullets at stone-throwing wildcat strikers at a chrome mine near the town of Rustenburg, 120 km (70 miles) northwest of Johannesburg.

The mining firm, Germany's Laxness, said the guards had fired rubber bullets into the ground in self-defence and contradicted the police tally, saying only two miners had been hit and three more injured in the commotion.

With economic growth this year forecast at less than 3 percent, Finance Minister Pravin Gordhan urged the government, unions and employers to avoid turmoil in mid-year wage rounds known as "strike season".

CONFIDENCE

"If we do not resolve our labour relations challenges, we will be losers. We will see deteriorating confidence, job losses and business failures," Gordhan told parliament in Cape Town.

In previous years, unions have started the bargaining process with lofty wage demands that are then whittled down to something slightly above inflation, now around 6 percent.

However, the usual dance between workers and management has been upset by a vicious turf war between mining unions that spilled over into deadly violence last year.

Last week, Lonmin suffered a wildcat walkout at Marikana after a gunman shot dead a union official in a bar and the National Union of Mineworkers said it would push for a pay rise of 60 percent for some categories of miner.

South Africa's carmakers saw minor labour disruptions in 2012 but investors fear a repeat of the wage-related strikes that crippled the sector two years previously as the economy was struggling to shrug off a 2009 recession.

Car industry bosses dismissed NUMSA's demands, setting the stage for a showdown when a three-year wage deal worth around 10 percent a year expires at the end of next month.

"It is common cause that the employers will not settle at 20 percent," said Thapelo Molapo, chairman of the Automobile Manufacturing Employers' Organisation.

The rand's 6 percent slide in two weeks is likely to stoke inflation and has killed any hopes of a growth-boosting interest rate cut from a central bank policy meeting on Thursday.

The currency has suffered its longest run of losing sessions since June 2008, when Eskom had to impose rolling blackouts.

The power cuts cost billions of dollars in lost output but, with the southern hemisphere winter closing in and demand climbing, the utility admits it may have to flick the switch once more to prevent the system tripping out.

Rising prices, union turmoil and a limping economy could yet damage the African National Congress in an election due early next year, although there is little chance that it will lose its outright majority in parliament.