4 Sep 2013

Miners strike could hit South African economy

10:52 am on 4 September 2013

About 80,000 gold miners in South Africa have gone on a strike to demand higher pay, but their union has significantly scaled down its demands.

The National Union of Mineworkers is now calling for a 10% wage rise, down from earlier demands for increases of up to 60% for some workers.

Workers last week rejected an offer of a 6% rise - the same as the current annual rate of inflation, the BBC reports.

South Africa's gold industry is one of the biggest in the world, but it has been in decline in recent years, while the platinum sector is still recovering from violence during last year's strikes.

It has been estimated that the gold miners' strike could cost South Africa more than $US30m a day in lost output.

Mine owners are warning it could lead to gold mines closing and thousands of jobs being lost. They say that their production costs have increased as they have had to dig ever deeper to extract gold.

South African's President Jacob Zuma has urged both sides to find a solution, saying: "A strike hurts both sides."

The NUM said it was aware of the "devastating" impact industrial action would have on the economy.

However, it was a "largely a white man's economy" with no benefits for poor black mineworkers, the NUM added.

Last year police shot dead 34 platinum miners during an unofficial strike called by a rival union, which accused the NUM of being too close to the ANC government.