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South Africa coal workers sign three-year wage agreement; Kangra to strike

London — South Africa's National Union of Mineworkers signed an agreement with the Chamber of Mines late Wednesday for a three-year wage increase for coal mine workers.

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The NUM represents coal workers at Anglo American Coal, Exxaro Coal Mpumalanga, Glencore Operations, Msobo Coal, Koornfontein Mines, Delmas Coal and Kangra Coal.

The signing will alleviate concerns the NUM would announce a nationwide strike at all mines involved in the negotiations.

However, workers at Kangra Coal rejected the wage offer, and will now strike from 11:00 am Friday. According to an NUM spokesman, Kangra was unable to match the offer presented by other coal miners.



The agreement amounts to 2018 wage increases of 6-7.5% or consumer inflation plus 0.5-1%, whichever is higher, and 7-8.5% or consumer inflation plus 1%, whichever is higher for 2019.

The strike at Kangra will last indefinitely until a wage agreement is reached, the NUM spokesman told S&P Global Platts. The mine produces 3 million mt/year of coal with an estimated 2 million mt exported via Richards Bay Coal Terminal.

Market reaction Thursday was muted, with just three screen trades for South Africa coal through web platform ICE and none via the CME exchange Thursday morning.

Market sources were not expecting much price movement to result from the strike at Kangra, saying current coal stockpiles at Richards Bay are estimated to be more than 5 million mt which would easy any supply concern.

S&P Global Platts assessed FOB Richards Bay 5,500 kcal/kg NAR coal at $73.80/mt on November 23.

--Joseph Clarke, joseph.clarke@spglobal.com

--Edited by Maurice Geller, maurice.geller@spglobal.com