Anglo, Xstrata, Exxaro Workers Strike at South Africa Coal Mines

July 24 (Bloomberg) — Anglo American Plc, Xstrata Plc and Exxaro Resources Ltd. workers today started a strike over pay at South African mines producing coal for use in local, European and Indian power plants.

“It has started,” Lesiba Seshoka, spokesman for the National Union of Mineworkers, said by phone from Johannesburg. ”We expect about 150,000 to take part” from the National Union of Mineworkers and Solidarity, another union, he said.

About 30,000 workers may participate in the action, Frans Barker, lead negotiator on behalf of the coal producers, said last week. The strike began at 6 p.m. Johannesburg time, with the start of the night shift.

The National Union of Mineworkers, or NUM, South Africa’s biggest labor union, wants a 14 percent pay increase, while coal producers are offering 7 percent, and 8.5 percent to entry-level employees. Steel, oil and chemical workers stopped work this month to demand above-inflation increases while gold and platinum miners have also threatened industrial action. Annual consumer inflation was at 5 percent in June, the highest in 15 months.

The country’s Richards Bay Coal Terminal is the largest in Africa, shipping 63 million metric tons annually, including to power plants in Europe and India. The terminal had 2.99 million tons of stockpiles at the end of June.

Eskom Holdings SOC Ltd., the largest domestic coal buyer, had ”relatively high” stocks, Barker said last week. Anglo and Exxaro are the largest suppliers of the fuel to the state-owned utility, producer of 95 percent of South Africa’s electricity.

A 2008 power shortage that shut the country’s largest mines for about five days was caused partly by a lack of coal. NUM- affiliated Workers at Eskom, which burns about 120 million tons of the fuel a year, last week also rejected a 5.5 percent pay offer.

Optimum Coal Holdings Ltd., Kangra Coal Ltd. and Delmas Coal Ltd. are among other companies whose workers are striking. Closely held Delmas Coal has offered a 7.5 percent increase for entry-level workers and 6 percent for other miners.

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