A strike by South African fuel workers that slowed commerce and caused panic buying at the pumps ended on Thursday just hours before 100,000 gold miners were to down tools in a move that could push up bullion prices.
Mediators said the union representing petroleum workers, seeking 9.5 per cent wage increases, had reached a deal with employers who had offered 8 per cent.
The country's annual "strike season" is in full swing with unions demanding 10-20 per cent pay rises, well above 5 per cent inflation. The strikes have already hit chemicals, coal and diamond mining with worries about economic damage increasing the longer they last.
Some 100,000 workers at AngloGold Ashanti, Gold Fields, Harmony Gold and another smaller mining group plan to walk off the job. The work stoppage could cost the sector about $25-million (U.S.) a day in lost output at a time when the precious metal is trading near record highs.
Their share prices extended losses on Thursday.
Unions representing coal workers said they held "inconclusive" talks with the chamber of mines on Thursday and gold sector talks were set for Friday.
At Emalahleni, 100 km east of Johannesburg, thousands of striking coal workers vented their anger near an Anglo American operation.
"I've worked 38 years for this company and I still get only 3,700 rand ($550) a month. How am I supposed to survive with that? And my family?" said one striking worker, Joseph, 55, who declined to give his last name.
Coal companies hit by the strike include Exxaro, Optimum Coal and Xstrata.
Strikes typically last up to a few weeks, with the average recent settlements being about 8 per cent annually. Employers, who see the wage deals as the cost of doing business, usually ramp up production after reaching new labour deals to try and make up lost production.
There is little political will to rein in unions with the ruling African National Congress in a governing alliance with the country's biggest labour federation, COSATU, which has supplied it with millions of votes.
The biggest worries for the economy are strikes that stretch into mid-August, work stoppages that hit state-utility Eskom, which provides almost all of the power to the country, or hit platinum, with South Africa being the world's largest producer of the precious metal.
GOLD FIGHT
"There are no new offers just yet," said Jabu Maphalala, the spokesman for the chamber of mines said of the gold dispute. Wage talks on that front are to resume on Friday.
NUM is seeking 14 per cent from the gold producers, who have offered between 7 to 9 per cent. In the coal sector, NUM is seeking 14 per cent while employers have offered 7-8.5 per cent.
South Africa was once the global leader in gold production but now is fourth in the world due to dwindling grades and increasing depths, with a short-term work stoppage unlikely to affect the spot price, which hit an all-time high of $1,628 an ounce on Wednesday on U.S. and European debt woes.
But analysts say a prolonged strike may push the price of bullion even higher.
Markets will also be watching the outcome of talks between the unions and Anglo American Platinum, which accounts for about 40 per cent of global production.
NUM is demanding an eye-popping 20 per cent and Amplats' last offer was 4.6 per cent.
"Even the threat of a strike sends a signal to investors that it is more dangerous to be short platinum, and that will in itself be supportive of prices," said David Jollie, an analyst at Mitsui Precious Metals in London.
Economist have warned that well-above-inflation settlements erode the country's global competitiveness by driving up the cost for a work force that is already more expensive and less efficient than those in emerging market rivals.
Employers have also been shedding jobs to pay for the higher wage bills, driving up an unemployment rate already at 25 per cent. While wages in the mining sector – which employs more than a half million people – have increased by nearly 30 per cent since September, 2008, about 22,000 jobs have been cut.