* Municipal workers latest to threaten industrial action
* Kumba losing 120,000 tonnes a day of iron ore output
* Xstrata latest platinum firm to suffer wildcat walkout
(Adds details, AngloGold, Xstrata)
By Agnieszka Flak and Sherilee Lakmidas
JOHANNESBURG, Oct 8 (Reuters) - South Africa's localgovernment workers' union said on Monday it would launch astrike over pay in the next few days, the first sign of a waveof labour unrest in Africa's biggest economy spreading from themines into the public sector.
Since August, close to 100,000 workers, including 75,000 inthe mining sector, have downed tools in often illegal andviolent protests that look likely to hit growth this year andundermine the government's efforts to cut its budget deficit.
Finance Minister Pravin Gordhan has promised to reduce thedeficit from the 4.6 percent of GDP forecast for this financialyear. Any public sector wage increase would make that moredifficult.
"The union is mobilising towards a national protest, whichwould begin as soon as this week," South African MunicipalWorkers Union (SAMWU) spokesman Tahir Sema said.
A majority of SAMWU's 190,000 members are expected to jointhe strike for "market-related salaries" which may last for oneday or drag on indefinitely, Sema said.
The strikes, which started in the platinum industry andspread to other mining companies and beyond, have raisedquestions about President Jacob Zuma's leadership and tarnishedSouth Africa's reputation among foreign investors.
The rand fell to a 3-1/2 year low against thedollar on Monday, while the cost of insuring South African debtagainst default increased, reflecting worsening investorsentiment toward local assets.
"International investors are really quite concerned aroundSouth Africa," said Mohammed Nalla, an analyst at NedbankCapital in Johannesburg. "Structurally and fundamentally, theoutlook on the rand is deteriorating."
Moody's cut South Africa's government bond rating lastmonth, citing the government's difficulty in keeping up witheconomic challenges and widening strikes.
ELAND ON STRIKE
Wildcat strikes have already shut down large parts of themining industry in the world's top platinum producer and a majorsupplier of gold, pushing prices of precious metals higher.
Xstrata is the latest victim, with workers at itsEland platinum mine walking out on Friday.
The mine is expected to produce 176,000 ounces of platinumthis year, compared with forecast production nationwide of 4.9million ounces of the precious metal used in jewellery andvehicle catalytic converters.
Anglo American Platinum (Amplats) fired 12,000wildcat strikers on Friday, a high-stakes attempt by the world'stop producer to squash illegal stoppages that have hit output atseven of its mines.
The dismissed workers were defiant and threatened a repeatof the showdown with security forces at rival Lonmin's Marikanamine that led to the police killing of 34 miners on Aug. 16, thebloodiest such incident since the end of apartheid in 1994.
"Those who are dismissed will make sure that there will beno operations operating and that will cause a massacre just likeat Marikana," said one worker representative, who asked not tobe named.
Other affected mining firms include Kumba Iron Ore ,which is losing 120,000 tonnes of output per day, and AngloGoldAshanti .
The world's third-largest bullion producer warned that aprolonged strike could lead to the closure of marginal shaftsand job losses, but said it was not considering mass sackings.
A strike by more than 20,000 truck drivers entered its thirdweek on Monday, hitting logistics companies and leading tofilling stations running out of some grades of fuel. Wage talkswith employers were expected to resume on Tuesday.
The main transport union, SATAWU, said it was gearing up fora one-day rail and port worker strike on Oct. 15, which couldhit exports of coal and other minerals.
(Additional reporting by David Dolan and Stella Mapenzauswa;Editing by Ed Cropley and Giles Elgood)
Keywords: SAFRICA STRIKES/