* Union signals strike in gold sector likely next week
* Construction workers will down tools from Monday
* Strikes are damaging Africa's biggest economy
* More pain for gold industry already "in crisis"
By Sherilee Lakmidas and Ed Stoddard
JOHANNESBURG, Aug 22 South Africa faced a strike
wave across leading sectors of the economy on Thursday and the
labour unrest threatened to hit its struggling gold industry,
already squeezed by rising costs and falling bullion prices.
Despite pleas from President Jacob Zuma and other government
leaders for peaceful wage negotiations in Africa's largest
economy, the National Union of Mineworkers (NUM) said its
members in the construction sector would down tools from Monday.
The NUM was also consulting its membership on a strike in
the gold industry, which could start next week following an
impasse in salary talks with mining companies.
Although South Africa has fallen in the world ranking of
gold producers, gold remains its main mineral export and the
industrial action, including an auto industry strike already
under way, will inflict more damage on the economy.
Violent wildcat walkouts in the mining industry last year
cost billions of dollars in lost output, dented economic growth,
and led to damaging downgrades of South Africa's credit rating.
More than 50 people died in protests at the mines.
The strife has also battered the rand, which dropped to a
new four-year low against the dollar early on Thursday.
"We trust that working together, all parties will cooperate
and see value in promoting lasting labour peace in our crucial
mining sector," Zuma said on Thursday.
He was addressing a gathering of the 85,000-strong SACTWU
textile workers' union, whose members also voted to walk out
possibly from as early as next week if no agreement is reached
with employers to settle a dispute over salary structures.
Increasing wage claims and militancy among workers
scrambling to make ends meet as their living costs rise pose a
big problem for Zuma's African National Congress (ANC)
government before elections scheduled for next year.
It faces accusations that since apartheid ended in 1994,
Nelson Mandela's liberation movement has paid more attention to
the interests of a wealthy elite than to the country's workers,
unemployed and poor.
Trade Minister Rob Davies cited "a deteriorating labour
relations environment, rooted in deep inequalities, rooted in
insecurities arising from changes in the fortunes of the mining
industry, insufficient career pathing, high levels of worker
"All of this, we think, has created a situation where there
are very high wage demands and a loss of patience with more
moderate negotiating frameworks," he said in Cape Town.
Kevin Lings, chief economist at Stanlib, told Reuters that
more strikes would scare off potential investors and raise the
cost of international borrowing for South Africa, if they led to
further credit downgrades.
"Overall, it has already done South Africa quite significant
damage and obviously ongoing strike action will continue to
undermine the ability of South Africa to prosper," he said.
GOLD INDUSTRY "IN CRISIS"
A strike would heap pressure on the declining gold industry,
where about half of South Africa's shafts are losing money as
producers are squeezed between growing worker militancy that has
pushed up wage costs and falling bullion prices.
Labour accounts for over 50 percent of costs and gold's spot
price is 30 percent lower than the record peak of over
$1,920 an ounce it attained almost two years ago.
"I do think that there needs to be some kind of recognition
by organised labour of the situation the mines find themselves
in. The gold industry is frankly in crisis," said Nick Holland,
chief executive of Gold Fields.
The NUM represents about 64 percent of the roughly 140,000
miners in the South African gold industry, where major operators
include AngloGold Ashanti, Gold Fields,
Harmony and Sibanye Gold.
The opposing sides in the gold sector remain far apart after
the weeks of talks. The employers' latest offer was a 6 percent
wage increase for some categories.
The NUM, which wants a 60 percent hike, walked out of the
talks with a smaller union, UASA, and applied for a so-called
"certificate of non-resolution" from the government mediator,
which was granted. This effectively allows them to strike.
"The earliest we will issue companies with notice of the
strike is Monday next week," NUM spokesman Lesiba Seshoka said.
With such notice normally coming 48 hours before any action,
this meant a gold industry stoppage could start on Wednesday.
The NUM's more hardline rival, the Association of
Mineworkers and Construction Union (AMCU) which represents about
17 percent of the gold labour force, has submitted wage demands
as high as 150 percent but is still engaged in negotiations.
A membership turf war between NUM and AMCU was behind last
year's mine violence.
The construction stoppage that has already been announced
would affect major companies such as Wilson Bayly Holmes Ovcon
, Aveng Ltd and Group Five Ltd.
South Africa's faltering economy is already losing an
estimated $60 million a day to a strike by 30,000 workers in the
car manufacturing sector that accounts for 6 percent of gross
This strike entered its fourth day on Thursday and has
affected global firms operating in South Africa, including
Toyota, Ford and General Motors.