Xstrata's S.Africa ops disrupted by strike

The South African operations of global miner Xstrata were disrupted on Monday after hundreds of workers joined a walk-out in protest over an employee share ownership programme, the company said.

Xstrata spokesman Songezo Zibi said the impact of the strike on its coal and alloys operations was yet to be determined.

All Xstrata Coal South Africa's operations are affected and a number of Xstrata Alloys operations have also been impacted, he said in a statement.

Xstrata's South African operations produced 8.4 million tonnes of thermal coal and 581,000 tonnes of ferrochrome, used to make stainless steel, in the six months to the end of June.

The alloys operations also produce vanadium and platinum group metals.

The National Union of Mineworkers (NUM) said last week it wanted employees to be compensated equally under a proposed share ownership programme, regardless of rank, while the company's plan compensates employees based on their level.

Around 5,180 workers or 43 percent of Xstrata's total workforce in South Africa are members of the NUM.

The union said it expected all of the workers to participate in the strike, although it was still counting the numbers of those who have walked off the job. Spokesman Lesiba Seshoka said other unions, which represent additional workers at Xstrata, may join the strike.

The strike is extensive and full-blown, Seshoka said.

He said the union expected the company to respond to its demands later on Monday, although no formal meetings had been scheduled.

Xstrata's Zibi said all discussions regarding the employee share ownership programme were suspended due to the strike.

The company employs just under 12,100 workers in South Africa, and three-quarters of them belong to unions.

Xstrata shares were down 0.64 percent in London at 1333 GMT, compared with a 0.13 percent fall in the FTSE 100 index.

Companies with operations in South Africa set up employee share programmes to increase worker ownership, particularly black ownership.

South Africa's black economic empowerment drive is aimed at rectifying the ownership and income disparities of white-minority apartheid rule.