South Africa miners' union threatens strike on Thursday

The strike by state workers seeking pay raises more than double the inflation rate started last week and has led to school closures, prevented medical treatment and caused bodies to pile up at state-run morgues.

The National Union of Mineworkers said its members would launch the solidarity strike next Thursday, limited to one day for now but it could be prolonged which would deal a blow to the country's mining sector -- responsible for 5 to 6 percent of South Africa's gross domestic product.

NUM is the biggest union in the country's largest labour federation COSATU, which says it has 2 million members and on Thursday filed seven-day strike notices that would allow members in affiliated unions to strike..

The NUM fully supports the public sector strike and would next week Thursday ensure that every mining operation, every construction site and every energy worker joins the public sector strike in different forms, it said in a statement.

South Africa is the world's fourth largest gold producer and largest platinum producer, with mines turning out about 488 kg (1,076 lb) of gold and 385 kg of platinum a day.

The country's biggest firms, such as Anglo Platinum, Impala Platinum and Harmony Gold Mining, have stockpiles of the precious metal and would not be hard-hit if it was a one-day work stoppage.

Thousands of municipal workers defied a court order and staged a one-day sympathy strike Friday that slowed garbage collection in major cities.

The NUM said Friday some workers at a Rio Tinto-BHP Billiton titanium joint venture had also downed tools in a dispute over wages.

BUDGET STRAIN

The government has said it cannot afford the state workers' demand of an 8.6 percent wage rise, more than double the inflation rate, and 1,000 rand ($137) a month as a housing allowance. It has offered 7 percent and 700 rand.

Any agreement to end the dispute is likely to swell state spending by about 1 to 2 percent, forcing the government to find new funds just as it tries to bring down a deficit totalling 6.7 percent of gross domestic product.

Spending on personnel is the biggest category of state expenditure, taking up about a third of the budget. In 2006/07, about 35 percent of tax revenue went to paying state employees and that rose to about 46 percent in 2009/10, which means any wage deal could lead to increased taxes.

Jasson Urbach, an economist with the Free Market Foundation, estimated the work stoppage was costing the economy about $150 million a day.

An expanded strike would add to worries about prospects for growth after the economy slowed more than expected in the second quarter of 2010 as mining contracted and manufacturing expanded at a slower pace.

Pressure is mounting on the government to reach a deal before it deals a significant blow to Africa's largest economy, which might also help it mend ties with COSATU, which has said their decades-long alliance was in jeopardy of rupture.

The unions are under the gun to reach a deal with public opinion turning against them after strikers harassed students trying to go to school and blocked the sick from seeking medical care, which health officials said led to several deaths.

(Additional reporting by Peroshni Govender, Phumza Macanda and Shapi Shacinda; Editing by Alison Williams)