Metals workers return to work in South Africa

New deal includes 10 per cent pay increase

JOHANNESBURG/CAPE TOWN (Reuters) — South African metal workers started returning to work on Tuesday after accepting a wage deal from employers, ending a four-week strike that dealt a blow to growth in Africa's most advanced economy.

NUMSA, the country's largest union, accepted a 10 percent annual pay increase fixed for three years for its lowest-paid workers on Monday.

The strike by over 200,000 NUMSA members had halted production at automakers and disrupted construction of new power plants in a country with a tight electricity supply.

"We are not sure whether we have full attendance yet, but there are sufficient volumes to resume production at my two plants," said Ken Manners, chief executive of SP Metal Forgings, a supplier of component parts to the auto industry.

Engineering firm Bell Equipment, which employs 2,000 workers at its Richards Bay plant on the east coast, said staff had reported for the early morning shift while General Motors South Africa expected to run at normal production levels from Wednesday.

Construction company Group Five said in a statement that most employees at its affected businesses had returned on Tuesday, adding it would take the rest of the week to refill its steel supply chain.

"Due to the severity of the strike, its impact will influence current and future business plans within the South African steel sector," Group Five said.

But the National Employers' Association of South Africa (NEASA), representing about 3,000 employers in the metals sector, said it would not sign the deal.

"We will not sign," NEASA spokesperson Sya van der Walt-Potgieter said, adding that the group's members were being urged to lock out tens of thousands of NUMSA members.

NEASA says its members cannot afford the wage hikes, which are well above the current inflation rate of 6.6 percent.

The South African Reserve Bank has expressed concern that pay increases which are not met by gains in productivity could trigger a wage-hike spiral and cost jobs.

The metals and engineering strike came on the heels of a five-month walkout in the platinum sector, the longest and costliest strike in South Africa's history which triggered a contraction in the economy in the first quarter.

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