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UPDATE 2-SAfrican rail and port workers in national strike

By Agnieszka Flak JOHANNESBURG, May 10 (Reuters) - Thousands of South African transport workers began a strike on Monday at logistics group Transnet, threatening to cripple rail, fuel pipelines and port operations in Africa's biggest economy after failed wage talks. The strike -- the latest in a series of public protests ahead of next month's soccer World Cup -- could paralyse coal and iron ore exports, fuel distribution, and interrupt shipping. Power utility Eskom said however the strike would have no impact on the transport of coal used to power its plants, as only small amounts of coal were carried by rail, with the rest supplied by conveyor belts directly from mines. Transnet, along with coal, iron ore, ferrochrome and fuel producers, said they had put contingency plans in place in anticipation of the strike to mitigate some interruptions. "The strike will not have a material immediate impact on our exports. In anticipation of a planned 10-day shutdown period scheduled by (Transnet Freight Rail) we had built up stocks at (Richards Bay Coal Terminal)," said Pranill Ramchander, spokesman for Anglo American. The group's thermal coal unit is the country's biggest coal exporter.

South Africa exports most of its coal to power stations in Europe, but increasingly to Asia as well. Kumba Iron Ore, also an Anglo unit, said the company had sufficient stocks at Saldanha port to keep loading vessels for at least seven days. If the strike is prolonged, it could also have a serious impact on the country's ferrochrome export industry, the world's largest, which is slowly recovering from recession. "This strike can have a serious impact if it goes on for more than two or three weeks. We rely on Transnet for transporting 75 percent of our material," said Tetsu Kotaki, Chief Executive of Gernic Ferrochrome, a unit of Japan's Mitsubishi Corporation. FRESH FRUIT Fuel suppliers said they were able to deliver products to customers for now. The South African Transport and Allied Workers Union (Satawu) began the strike with the early shift on Monday, said policy research officer Jane Barrett, with all of its 20,000 members expected to participate. Most producers were able to build up their stocks ahead of the strike, but this was not an option for Freshgold SA Exports, which ships fresh produce out of the country. "The strike has physically halted our container loadings from this morning ... if it's a week the impact will be quite severe," said Freshgold Managing Director Pieter von Maltitz. Two unions representing workers in the sector want a 15 percent pay increase. Transnet had originally offered an 8 percent raise but then increased the offer to 11 percent. Unions were divided over Transnet's new offer. Satawu said Transnet's latest offer was misleading as it had removed the crucial 'no-lay offs' clause, leaving workers vulnerable to job cuts, and failed to improve medical and housing subsidies. The United Transport and Allied Trade Union (Utatu) urged its affiliates to accept the offer and report for duty on Monday. Chris de Vos, Utatu's Secretary General, said the union was consulting members on the latest offer. "Under the current circumstances, when inflation is 5.1 percent, we believe this is a good offer and we are getting good feedback from our members so far," he told Reuters. If Utatu's members reject the offer, the union would join the strike by Wednesday, he said. The two unions represent 85 percent of Transnet's workforce of about 54,000 people. (Additional reporting by Shapi Shacinda and Olivia Kumwenda; Editing by Giles Elgood) (For more Africa cover visit: http://af.reuters.com -- To comment on this story email: SouthAfrica.Newsroom@reuters.com) Keywords: TRANSNET/ (agnieszka.flak@reuters.com; +27 11 775 3154; Reuters Messaging: agnieszka.flak.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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