The United National Transport Union, which represents some of the workers at South African ports and freight rail operator Transnet, told its members to begin a strike on Thursday to demand a bigger wage increase from the state-owned company.
Transnet on Wednesday doubled its pay-increase offer to 3% to head off the strike action. The proposed raise is well below annual inflation of 7.6%.
The company’s offer “is not aligned with the mandate that was given to us by the members,” Cobus van Vuuren, general secretary of Untu, as the labour union is known, said in a phone interview on Thursday. “The strike is on. There is action across the country.”
Transnet’s rail and port facilities are key to South African exports of bulk commodities such as coal, iron ore, chrome and manganese. A strike would add to the damage the economy suffered in April, when floods in the eastern KwaZulu-Natal province destroyed rail infrastructure and disrupted operations at harbours.
Existing logistics constraints at Transnet are expected to cost South Africa’s mining industry R50 billion in lost opportunities this year, Roger Baxter, chief executive officer of Minerals Council South Africa, said at a conference on Wednesday.
The poor performance of Transnet rail lines and other infrastructure is as bad for the industry as the regular power outages the state electricity provider is implementing, he said.
“At a logistics level, the performance is as bad as what it is at an energy level,” he said.
Transnet is assessing the impact of the strike on operations, spokeswoman Ayanda Shezi said.
“Our priority is to protect assets and those employees who have reported for duty,” she said in a text message on Thursday. “The strike is illegal and unprotected as certain prescripts were not followed in applying to strike.”
The remuneration of state employees accounts for almost a third of total government spending, and keeping it in check is key to the National Treasury’s plans to rein in its budget deficit and bring runaway state debt under control.
In July, Eskom, the state power utility, signed a pay deal with labour unions for a 7% increase to end an impasse that triggered a week of illegal protests and deepened electricity outages.