* Wage settlements hurting long-term outlook for country
* Prolonged strikes are major worry for investors
(Recasts with start of gold strike, Amplats talks)
By Agnieszka Flak
EMALAHLENI, South Africa, July 28 Some 100,000
South African gold miners went on strike on Thursday, but fuel
workers ended a stoppage that had slowed commerce and caused
Mediators said the union representing petroleum workers,
seeking 9.5 percent wage increases, had reached a deal with
employers who had offered 8 percent. They settled on an
across-the-board 8.5 percent increase, industry sources said.
The country's annual "strike season" is in full swing, with
unions demanding 10-20 percent pay rises, well above five
percent inflation. The strikes have already hit chemicals and
coal and diamond mining, with worries about economic damage
increasing the longer they last.
Workers at AngloGold Ashanti , Gold Fields ,
Harmony Gold and another smaller mining group walked
off the job at 1600 GMT.
The stoppage could cost the sector $25 million a day in
lost output at a time when gold is trading near record highs.
The trio's share prices extended losses on Thursday.
Unions said they had held "inconclusive" negotiations with
the chamber of mines on Thursday.
Pay talks with Anglo American Platinum , which
accounts for 40 percent of global platinum output, will resume
Oupa Komane, the National Union of Mineworkers' chief
negotiator with Amplats, said the union had cut its wage demand
to 15 percent from 20 percent and the company was offering 6 to
Strikes typically last up to a few weeks, with average
recent settlements being about 8 percent. Employers usually ramp
up production after reaching new pay deals, to try to make up
for lost output.
There is little political will to rein in unions. The ruling
African National Congress is in a governing alliance with the
country's biggest labour federation COSATU, which has supplied
it with millions of votes.
The biggest worries for the economy are strikes that
stretch into mid-August, hit state-utility Eskom, which provides
almost all the country's power, or hit platinum. South Africa is
the world's largest producer of the precious metal.
At Emalahleni, 100 km (60 miles) east of Johannesburg,
thousands of striking coal workers vented their anger near an
Anglo American operation.
"I've worked 38 years for this company and I still get only
3,700 rand ($550) a month. How am I supposed to survive with
that? And my family?" said Joseph, 55, who declined to give his
Coal companies hit by the strike include Exxaro ,
Optimum Coal and Xstrata .
NUM is seeking 14 percent from the gold producers, who have
offered 7 to 9 percent. In the coal sector, NUM is seeking 14
percent while employers have offered 7-8.5 percent.
South Africa was once the global leader in gold production
but has slipped to fourth due to dwindling grades and increasing
depths. A a short-term work stoppage is unlikely to affect the
spot price, which hit an all-time high of $1,628 an ounce on
Wednesday on U.S. and European debt woes.
But analysts have said a prolonged strike may push the price
of bullion even higher. Gold prices yielded some gains to trade
at just over $1,600 an ounce on Thursday.
Economists have warned that well-above-inflation settlements
erode the country's global competitiveness by driving up the
cost of a workforce that is already more expensive and less
efficient than those in emerging market rivals.
Employers have also been shedding jobs to pay for the higher
wage bills, driving up an unemployment rate that rose further in
the second quarter to hit 25.7 percent. The mining sector lost
31,000 jobs in the period, data released on Thursday said.
(Writing by Ed Stoddard; Additional reporting by Jan Harvey in
London and Olivia Kumwenda in Johannesburg; Editing by Jon