UPDATE 2-Striking South African metalworkers lower wage demand - unions

Sun Jul 20, 2014 12:38pm EDT

* Smaller unions say new wage offer on the table

* Increases are for 8 or 10 pct, depending on pay grade

* Opposition from main NUMSA members would delay resolution

* Unions and employers due to meet on Tuesday (Adds further details and background)

By David Dolan

JOHANNESBURG, July 20 (Reuters) - Labour unions representing striking South African metalworkers have submitted a lower wage demand to employers, union representatives said on Sunday, to try to end the walkout battering Africa's most developed economy.

More than 200,000 metal and engineering workers downed tools at the start of the month demanding wage increases of between 12 to 15 percent and disrupting the supply of auto components and construction work at two crucial power stations.

The walkout, coming just weeks after the end of a crippling five-month strike in the platinum industry, is the latest blow to South Africa's ailing economy and has further unnerved investors impatient with waves of labour unrest.

Six striking unions have been meeting with employers this weekend in an effort to end the strike that has forced U.S. automaker Ford Motor Co and others to halt production at their South African plants.

The new proposal is for a three-year agreement with annual increases of 8 or 10 percent depending on pay grade, said Johan van Niekerk, a spokesman for the United Association of South Africa, a smaller union in the talks.

"We're very close to each other," van Niekerk said. "By Tuesday morning if we get a favourable response from employers, it could be the end of the strike."

Both van Niekerk and Marius Croucamp, a spokesman for the Solidarity union, which is participating in the talks because its workers have been locked out by the strike, said the main National Union of Metalworkers of South Africa (NUMSA) had backed the proposal.

NUMSA General Secretary Irvin Jim confirmed there was "a proposal on the table" but he declined to give further details.

A spokeswoman for the main employer group was not immediately available for comment.

NUMSA AGREEMENT CRITICAL

The unions are due to canvass their own members about the proposal on Monday, although the demand is within a previously mandated range, van Niekerk said, with unions and employers due to meet again on Tuesday.

But any last-minute opposition from NUMSA would delay an end to the stoppage, as the dominant union in the strike.

South Africa's main manufacturing union, NUMSA previously rejected an offer from employers for an increase of 10 percent followed by 9.5 percent in 2015 and 9 percent a year later.

Jim said last week that NUMSA members - who tend to be lower skilled and lower paid than members of the largely white Solidarity - would not accept less than a 10 percent annual rise over three years, saying black workers were underpaid.

South Africa's government is concerned about the state of industrial relations, the finance minister said on Thursday.

The economy contracted in the first quarter of the year, dragged down by the five-month platinum strike that slashed output from the world's three largest producers.

The metalworkers strike is likely to keep second-quarter growth depressed, although the central bank governor, Gill Marcus, has said she did not expect a recession. (Reporting by David Dolan; Editing by Rosalind Russell)