5 August 2009 – The threat of electricity disruptions in South Africa were raised as members of SA’s biggest union planned to strike at power firm Eskom next week after rejecting a wage offer.
The union’s threat of a national power shutdown has brought concern that output could be affected at platinum mines in the world’s top producer, which is also a major gold producer, and damage investor sentiment.
The National Union of Mineworkers (NUM), which has 16,000 members at Eskom, said a strike was inevitable and labour action could start on Monday or Tuesday.
NUM spokesman, Lesiba Seshoka said that he don’t see how a strike can be avoided and that they plan to start mass action as early as next week.
Electricity blackouts early last year temporarily crippled mining production.
Seshoka said NUM would consult two smaller unions also representing Eskom workers before deciding on a date for the strike.
As well as disrupting the economy, a power strike would be a challenge to new President Jacob Zuma’s authority as he tries to lead South Africa through its first recession in 17 years and defuse anger in poor townships.
A week-long council workers strike disrupted public services before workers settled for a wage increase almost double inflation. Inflation currently stands at 6.9 percent annually
Economists have cautioned that double-digit wage increases could push inflation higher and could hit profits and ultimately the government’s tax revenue which is already seen falling short by about 60 billion rand in 2009/10.
Traders have warned that extended strikes, that lead to wider impact on the economy, could hit South Africa’s volatile rand currency which has up to now ignored the labour unrest.