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Business appeals for swift resolution to Transnet strike, as miners lose R815m a day

Transnet container terminal

Transnet container terminal

Photo by Creamer Media

13th October 2022

By: Terence Creamer

Creamer Media Editor

     

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As the impasse between Transnet and its two recognised unions – the United National Transport Union (Untu) and the South African Transport and Allied Workers Union (Satawu) – continues, organised business has called for a “swift, sustainable resolution”, as mining exporters warned that they were losing R815-million every day the strike continued.

In a joint statement, Business Unity South Africa (Busa) and Business Leadership South Africa rejected short-term solutions, such as temporarily increasing levies, which they said could have unintended consequences.

“We need a quick, sustainable resolution to this strike, not ad hoc solutions,” Busa CEO Cas Coovadia said.

“The strike risks severe damage to the economy not just in the short term but also the longer term if it drags on and South Africa’s reputation for logistics gets further tarnished.” 

Both organisations rejected earlier media reports suggesting that they would support a so-called ‘Avoidance of Strike Levy’.

They also expressed anxiety over the prospect of the strike enduring for more than a few days, warning that cargo ships would not only skip slots at South African ports but start taking South African ports out of schedules in the months ahead.

“This will add significant costs to either airfreight items or truck goods to and from other African ports – which will add to the inflation pressures South Africans are facing.”

Minerals Council South Africa, meanwhile, estimated that bulk mineral exporters were losing R815-million daily, because they had been unable to rail and load 357 000 t of iron-ore, coal, chrome, ferrochrome and manganese onto ships.

“On average, South Africa exports about 476 000 t of bulk minerals a day worth R1.06-billion.

“We estimate that just 120 000 t of minerals worth R261-million are being exported daily, [given that] mineral export harbours are operating at between 12% and 30% of their daily averages,” the council said in a statement.

As with the other orgnaised business formations, the council also warned that the damage caused by the strike was not only limited to the immediate losses and could have longer-term consequences, including damaging South Africa’s reputation as a reliable supplier to global markets.

“The Minerals Council is deeply concerned that the labour action at Transnet will compound the losses our bulk mineral exporting members are already experiencing because of Transnet struggling to meet targeted annual tonnages on its rail network and throughput at ports.”

The council has estimated previously that there had been an export loss of R50-billion on an annualised basis this year for iron-ore, coal, chrome, ferrochrome and manganese exporters as measured by delivered tonnages against contracted rail volumes.

“In contrast, R151-billion could be gained in additional exports, with the concomitant benefits of employment in mining increasing by 40 000 jobs to 500 000, the fiscus benefiting from improved tax revenue and higher revenues for Transnet if all rail and ports systems were optimally and efficiently run at design capacity.”

EXTREMELY CONCERNED

In a separate joint statement, Ministers Pravin Gordhan, Thulas Nxesi and Thoko Didiza said they were “extremely concerned” about the negative impact of the strike on the South African economy.

“It is the view of government, that it will be in the interests of the country to find a speedy resolution to this impasse and for parties to continue to engage and, where appropriate, to employ the facilitation services of the Commission for Conciliation, Mediation and Arbitration (CCMA).

“Our country cannot afford further job losses in other sectors of the economy and the interruption of imports and exports to and from South Africa,” the three Ministers said.

Despite this growing pressure, Untu and Satawu have indicated they were likely to reject the latest three-year offer tabled by Transnet following two days of CCMA-facilitated negotiations.

The wage offer, which Transnet said would be backdated to April 1, proposes a 4.5% across-the-board increase in the current year to be implemented from October 1, followed by increases of 5.3% apiece in 2023/24 and 2024/25.

It also includes a 4.5% increase in the medical aid allowance in 2022/23, which would be adjusted in line with the increases proposed for the subsequent two years.

The back-pay, Transnet proposed, would be paid in two tranches – three months’ back-pay on November 15, 2022, and three months’ back-pay on January 16, 2023.

The two unions entered the negotiations seeking increases of between 12% and 13.5% and have indicated on several occasions that they would not accept anything below inflation and were also not willing to contemplate a three-year offer.

South African consumer price inflation was 7.6% in August.

Edited by Creamer Media Reporter

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