Labour unions at South Africa\u2019s state-owned ports and freight-rail company threatened to begin a strike this week after rejecting its latest wage offer, a move that may curb shipments of coal and other minerals.<\/p>\n
The United National Transport Union served Transnet with a 48-hour notice that its members plan to stop work from Oct. 6, according to a statement. The South African Transport and Allied Workers Union said separately that it will notify Transnet today of its plan to begin a strike on Oct. 10.<\/p>\n
Transnet\u2019s rail and ports facilities are key to South African exports of bulk commodities such as coal, iron ore, chrome and manganese.<\/p>\n
Producers including Thungela Resources and Exxaro Resources are already unable to exploit the full potential offered by a surge in global demand for coal burned at power plants because of a lack of rail capacity at Transnet.<\/p>\n
The company said its offer to labor unions of a 1.5% pay increase and a once-off payment of R10,000 ($563) before tax is reasonable as it takes into account the company\u2019s \u201cfinancial and operational challenges.\u201d<\/p>\n
Transnet\u2019s pay increase must be aligned with the rise in the cost of living and current inflation, the UNTU said. Annual inflation in South Africa is currently 7.6%.<\/p>\n
Transnet said it applied to the Commission for Conciliation, Mediation and Arbitration to try and break the deadlock with the labor unions. A mediation process is expected to start on Oct. 12 and won\u2019t affect the strike action, Satawu said.<\/p>\n
\u201cTransnet has consistently made the point that its wage bill currently makes up over 66% of monthly operating costs,\u201d the company said in a statement. \u201cThis is not sustainable, particularly given the current operational and financial performance.\u201d<\/p>\n