Strikes to spread to gold sector

Gold miners will join thousands of workers already in a nationwide strike this week, threatening supply of the precious metal at a time when bullion is at record highs.

Hundreds of thousands of workers across the country have downed tools in recent weeks, or are threatening to do so, seeking raises double or triple the 5 percent inflation rate in the mid-year bargaining session known as "strike season".

The powerful National Union of Mineworkers (NUM) wants a 14 percent increases in wages from gold employers -- including AngloGold Ashanti , Gold Fields and Harmony , which have offered rises between 7 and 9 percent.

"We are disappointed by the decision taken by the unions. The offers made by employers today were a big jump from where we were the last time and were made as an indication of commitment by employers to reach a resolution with the unions," Elize Strydom, the chamber of mines' negotiator for the gold sector, said in a statement issued late on Monday.

The NUM said it would serve employers with a 48-hour strike notice, which would lead to miners going on strike on Thursday.

Coal miners walked off the job on Monday, following workers in the diamond, fuel and engineering sectors, although power utility Eskom said there was no immediate danger to supply to its coal-fired plants due to sufficient stocks.

Optimum Coal , South Africa's sixth largest coal miner which sold 10.6 million tonnes of coal in the 2010 financial year, is operating at 10 to 20 percent of its normal capacity due to a strike over wages which started with the late shift on Sunday, an official said on Tuesday.

"We are producing a very small amount of coal ... in the order of 10-20 percent of our normal production," a company official said, but declined to be named.

"We know that there is a meeting today between the chamber of mines and the National Union of Mineworkers and we are confident that there will be an offer that is acceptable. We hope that by Thursday we will be back in production."

Should the strike be prolonged, it could hit already strained supply of electricity and coal exports.

Unions and employers in the sector will resume talks on Tuesday in a bid to end the dispute. The NUM has been seeking inflation-busting 14 percent wage increases, above the employers' offer of 7 to 8.5 percent.

Employers over the past two years have struck wage deals averaging about 8 percent with many firms seeing the above-inflation settlements as a necessary cost of doing business in South Africa. They have also slashed jobs over the period to make up for the higher personnel costs.

FUEL SECTOR TALKS

Unions will also hold talks with employers in the fuel sector, hoping to end a strike which is into its third week and has left hundreds of pumps dry across the country.

Economists have said wage settlements well above inflation hurt competitiveness and long-term outlook by driving up the costs for a labour force already more expensive than those in other emerging markets and far less efficient.

Gold held steady below its record high on Tuesday as investors waited to see if President Barack Obama's appeal for an agreement on stalemated U.S. debt talks would provoke signs of progress, while the euro zone debt crisis and the looming South African strike in the sector lent support.

South Africa was the world's fourth-largest gold producer in 2010, after China, Australia and the United States, Reuters' data show.