UPDATE 2-South African police fire rubber bullets to disperse striking workers

Thu Jul 3, 2014 10:00am EDT

Related Topics

* Strikers were blocking entrance to building site

* NUMSA and employers' body to meet later on Thursday

* Nampak say 40 pct of workers in metals unit off work (Adds Nampak comment, charges of violence, Moody's)

By Tiisetso Motsoeneng

JOHANNESBURG, July 3 (Reuters) - South African police fired rubber bullets to disperse workers who blocked the entrance to the construction site of state power utility Eskom's Medupi power station on the third day of a wage strike.

More than 220,000 metal and engineering workers from the National Union of Metalworkers of South Africa (NUMSA), the country's single largest labour grouping, went on an open-ended strike on Tuesday, a week after a crippling platinum mine strike ended.

The strike has disrupted construction work at two badly needed Eskom power plants: Medupi in northern Limpopo province and Kusile, whose completion has been delayed, partly by industrial action.

"A few hundred workers were blocking one of the entrances to Medupi power plant and we had to use rubber bullets to disperse them," police spokeswoman Ronel Otto said, adding the situation had been contained by the afternoon.

NUMSA was due to meet the main employers' body, the Steel and Engineering Industries Federation of Southern Africa (SEIFSA), later on Thursday to try to end the latest strike to hit Africa's most advanced, but ailing, economy.

The stoppage is costing South Africa some 300 million rand ($28 million) a day in lost output and will further dent investor confidence hurt by a 20-week platinum strike that dragged the economy into contraction in the first quarter.

The labour unrest would consign South Africa to a third consecutive year of sub-par growth and posed risks for its credit rating, Moody's said in a statement.

NUMSA is demanding wage increases of between 12 and 15 percent - at least double the official inflation rate - from employers represented by SEIFSA.

EMPLOYERS CONDEMN VIOLENCE

The employers' body condemned what it called the violent behaviour of some striking workers on Thursday.

"The right to strike should be exercised without infringing on the rights of others and without creating a perception of lawlessness," it said in a statement.

NUMSA rejected the allegation as a ploy to undermine the strike.

The National Employers' Association of South Africa (NEASA), which represents close to 3,000 mainly small and medium-sized businesses, said it would not agree to a double-digit wage increase. It is due to meet NUMSA on Friday.

"My position is I cannot go beyond eight percent," NEASA chief executive Gerhard Papenfus told Reuters. "This industry is in severe difficulty and 10 percent is irresponsible."

The stoppage is already hitting the supply of beverage cans and auto parts and the automotive sector might have to halt production if it continues beyond a week.

South Africa's biggest packaging group, Nampak Ltd, said about 40 percent of the 4,000 employees in its metals and rigid plastics division had failed to report for work.

"We are running but we are not fully operational," said head of human resources Fezekile Tshiqi. "We might be at risk the longer it goes on. We should cope up to end of this week and struggle a bit from early next week."

Shares in Nampak, which derives nearly half of its 18.2 billion-rand annual sales from its metals and glass divisions, were little changed at 37.45 rand. ($1 = 10.7754 South African Rand) (Additional reporting by Wendell Roelf in Cape Town; Editing by Stella Mapenzauswa and Andrew Roche)

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