By James Macharia
JOHANNESBURG (Reuters) - South Africa's biggest union agreed a wage deal with gold and coal producers on Tuesday, averting a strike in the mining industry and easing pressure on President Jacob Zuma.
But council workers stayed on strike for a second day in the latest stand-off between Zuma and the unions who helped bring him to power at an election in April.
South Africa is suffering its first recession since 1992 which unions say has hit hardest the country's poor.
The National Union of Mineworkers (NUM) said it would sign the new gold and coal pay agreement later on Tuesday. The 150,000-strong sector is a major foreign exchange earner and symbol of South Africa's economic power.
"We are going to sign. We will definitely sign the agreements. We will sign for both the gold and coal sectors," NUM spokesman Lesiba Seshoka told Reuters.
The union had accepted a wage offer of between 9 and 10.5 percent in the gold sector -- the third biggest global producer of the precious metal -- after initially demanding a hike of 15 percent. Annual inflation stands at 8 percent.
Tens of thousands of council workers stopped work on Monday over their demands for a 15 percent wage hike.
The South African Municipal Workers Union (SAMWU) and Independent Municipal and Allied Trade Union, representing some 150,000 council workers, have rejected an initial offer of an 11.5 percent wage increase.
SAMWU general-secretary Mthandeki Nhlapo said the union was considering an improved offer and would decide on Wednesday whether to call off the strike.
SAMWU said this week 70 percent of council workers earn less than the 5,000 rand (£392) monthly minimum wage the union is demanding.
TOWNSHIP PROTESTS
South Africa's financial markets have not yet reacted to the council strike, but analysts say prolonged action could change that. Workers in the chemical sector have also been on strike over higher pay.
The strike by public transport workers, refuse collectors and licensing officers follows days of violent protests by residents of impoverished townships who have complained about lack of healthcare, water and electricity.
Less than three months after he took office following the ruling ANC's election victory, Zuma is caught between delivering on promises to improve the lives of the poor and the realities of an economy in recession.
Official data on Tuesday showed unemployment in the second quarter stood at 23.6 percent, a slight increase on the previous quarter, with 4.125 million people out of work.
"He (Zuma) is caught in a very unfortunate position. A lot of promises were made going into the election and those promises were maybe very ambitious," said Brait economist Colen Garrow.
Peter Attard Montalto, emerging market economist at Nomura International, said: "The real test is only beginning now, I think he obviously came to power with a mantra of change. That is what is driving all these strikes."
(Additional reporting by Stella Mapenzauswa and Alison Raymond; Writing by Marius Bosch; Editing by Robert Woodward)
