strike threa t affects rand
THREATS of a possible strike by South Africa's biggest union against Eskom saw the rand slide yesterday to its biggest one-day fall since about three months ago.
The National Union of Mineworkers, which represents 16000 workers at the power utility, said it would organise a march next Thursday to press Eskom for better pay.
Renewed strike threats helped push the rand to a three-week low as investors fretted about the impact on an economy struggling with its first recession in 17 years.
The currency fell as much as 2,46percent, its biggest one-day decline since May 11, according to Reuters data.
While concerns of blackouts were chief among consumers and analysts' minds, NUM spokesman Lesiba Seshoka said: "Our focus is not on bringing blackouts, our focus is on getting the demands of our members met urgently."
The union expects 33000 out of Eskom's 35000-strong workforce to down tools next week.
Eskom spokesperson Andrew Etzinger said the utility was mindful of and concerned about "any implications of strike action", but it was adhering to the process of mediation that it had began with the unions through the Commission for Conciliation, Mediation and Arbitration.
He said: "We believe that the best process is where we are right now and if necessary, we will go to arbitration. We take this very seriously."
Seshoka said the NUM had learnt Eskom was seeking a court order to ban the strike. Etzinger denied the claim.
A drawn-out strike could hit shares and send precious metal prices rocketing as happened in January last year when South Africa suffered a near-collapse of its power grid, analysts said.
"If it's a drawn-out strike of weeks then it is a huge problem, but if it is a couple of days then we can somehow live with it," said Johan de Kock, head of equity research at Metropolitan Asset Managers.
The National Union of Metal Workers of South Africa, which has some 5000 workers at Eskom, also said it would strike. Trade union Solidarity, which represents about 8000 workers at Eskom, said a prolonged strike could affect power supply.
Several of South Africa's mining groups said they planned to meet Eskom soon to discuss the threatened strike.
Talks today will determine if unions will carry out the threats.