Courtesy of Africa Political & Economic Strategic Center

Strike by 200,000 union metalworkers in South Africa had disrupted materials delivery to construction sites and halted some projects.

Two of South Africa largest workers unions have called off a crippling strike involving more than 200,000 engineers and mining and metals workers, which had starved construction contractors of materials and disrupted work at two of Africa’s largest coal-fired power plants.

The National Union of Metalworkers of South Africa accepted terms from the Steel and Engineering Federation of South Africa to raise salaries for the lowest paid workers up to 10% and reached compromise on provisions that labor officials had earlier claimed would affect future bargaining.

"The settlement offer has been overwhelmingly and unanimously accepted by members," said NUMSA General Secretary Irvin Jim.

However, the National Employers' Association of South Africa (NEASA), which represents about 3,000 employers in the metals sector, rejected the deal as “unsustainable” and threatened to lock out workers until a consensus is reached.

The strike had affected numerous projects of South Africa's key contractors— including WBHO Construction, Group Five, Murray & Roberts Holdings Ltd., Aveng and Basil Read—with workers protesting wages, housing allowances and unresolved policy on third-party hiring and contract workers. Some of these issues are still not fully resolved, union officials say.

Construction work at the 4,800-MW Kusile dry-cooled coal-fired powerplant was one affected project. At least 1,400 workers employed by a consortium of firms led by Murray & Roberts, which is South Africa's largest contractor, laid down tools at the site.

At the Medupi coal-fired power project, an estimated 1,000 workers had joined in the strike, which further delayed South Africa power utility Eskom's attempts to fast-track electricity generation to meet surging demand and rationing.

A leading construction trade group, the Master Builders of South Africa (MBSA), said in Mid-July that the disruption of building materials to contractors had threatened to delay delivery of projects, with possible legal repercussions.

In comments on July 16 to South African media, Tumi Dlamini, the group's CEO, said work had "slowed down substantially on building sites as MBSA members are deprived of essential building components." She added that the strike "could well be the last straw for many struggling contractors."

Diamini singled out the unavailability of steel for reinforcing building foundation work and scarcity of materials for windows and cladding.

Striking workers had been seeking a 12% salary increase after rejecting an offer by the South African Federation of Civil Engineering Contractors on behalf of construction companies, which offered an 8% to 10% spread over three years.

On July 21, U.K.-based leading global platinum miner Anglo-American Platinum announced plans to close its two mines in South Africa after a separate six-month strike earlier this year led to a 40% decline in annual production.

The company said it had lost nearly 424,000 ounces since the strike commenced in January.

At least 80,000 workers at its Rustenburg mine are members of the Association of Mineworkers and Construction Union, which called that strike.

An analysis by Citigroup in Johannesburg said the metalworkers' strike may have affected 10,500 companies, accounting for 4% of gross domestic product, according to Reuters.