Coal sector wage strike causes no panic – yet
No scarcity of supply for now
THE COAL sector wage strike was increasing the demand and trade in local coal on fears of supply scarcity, but this trend would not last forever, Xavier Prevost, a senior coal analyst at XMP Consulting, warned yesterday.
“The strike created fear of a scarcity of coal, and in the last few days there have been more trades in coal. There is more interest, it is helping a bit, but is not going to last forever,” Prevost said.
Around 30 000 National Union of Mineworkers (NUM) downed tools during Sunday’s night shift after talks with the coal mining companies represented by the Chamber of Mines broke down last week.
The chamber represents Anglo Coal, Glencore, Exxaro, Kangra, and Msobo Coal in the wage talks. These companies’ coal mines are now shut due to the strike. The NUM, which represents 70 percent of the coal mineworkers, rejected an 8.5 percent wage hike.
At the same time the coal mining companies had their backs against the wall after the coal price fell by 30 percent this year, the Chamber of Mines’ chief negotiator, Elize Strydom, told journalists yesterday.
Downplayed
Richards Bay Coal Terminal (RBCT), South Africa’s major coal export facility, has downplayed the impact of the strike as business and organised labour met yesterday.
RBCT spokeswoman Gcina Nhleko said the strike had had no effect on its operations. She declined to give details of the stockpiles, saying the information was confidential.
“The RBCT has been operating at normal capacity. We have not been affected. The shifts are still the same,” Nhleko said.
Prevost said RBCT was likely to have around 5 million tons of stockpiles, which could last two months.
A number of RBCT exporters continue to rail coal to the facility as they are not affected by the strike. These companies include: South32, Sasol Mining and African Rainbow Minerals.
“I think it will be a be more than a month before we can feel the impact of the strike,” said Prevost. He said RBCT coal prices had risen by 35 US cents a ton since the strike started to $50.60 (R680.87) a ton.
“The strike is going to make it difficult for mines to operate and it will not help workers, who stand the risk of losing their jobs. Mines like Anglo Coal and Glencore are not going to close because of a strike, but smaller mines may not survive,” Prevost added.
The NUM is demanding a wage increase of R1 000 a month or a 17 percent hike from the existing minimum wage of about R6 000 a month in the sector. Its initial demand was for a R3 000 a month wage hike.
“There is a slight sense of a glimmer of hope that we would get an agreement,” said Peter Bailey, the chief negotiator for the coal sector at the NUM.
“No one wants a strike. We are all sensitive to what hap- pens during a strike,” the chamber’s Strydom said.
Anglo Coal said it was too early to count the cost of the strike on operations.
“At this early stage, we are not able to firmly advise on the risk to our shipping programme as this will depend on how long the strike lasts,” Anglo Coal spokesman Moeketsi Mofokeng said yesterday.
Anglo Coal supplies coal exclusively to the Kriel, Tutuka and Lethabo power stations.
Mzila Mthenjane, an Exxaro spokesman, said its Arnot and Matla operations, which supply Eskom’s Arnot and Matla power stations in Mpumalanga, have been affected by the strike. “The operations that are affected supply Eskom only. There will be no impact on exports,” he said.
The strike has raised fears about power supply, especially if it becomes protracted.
“The longest coal industry strike in the last decade happened in 2013 and lasted for three weeks. Hence it is anticipated that the parties will resolve the labour dispute within 30 days,” Eskom said. “However, should the strike go beyond 30 days Eskom has an option to move coal around from some power stations to others to mitigate any shortage of coal.” – Additional reporting by Reuters