Johannesburg - South Africa's rand fell for a second straight session against the dollar on Tuesday, as talks to avert a wage-strike by the country's largest union stalled, threatening to disrupt an already tight power supply.

The local unit had weakened by 0.34 percent to 10.6720 rand against the greenback at 17:38 SA time.

The strike over wages by more than 220,000 engineering and steel workers has already affected construction at two of state power utility Eskom's power plants, pushing it to seek an interdict to block its employees from striking .

The strike will cost over 300 million rand a day ($28.12 million), according to employers, further slowing growth after a GDP contraction in the first quarter of 2014.

The strike is also likely to affect production in the car manufacturing industry, another blow to an economy reeling from a recently resolved 22-week strike in the platinum sector.

“That's been a double whammy for our poor rand,” said Cheslyn Francis of Afrifocus Securities.

“The impact on Eskom and the GDP will be adverse.”

Finance minister Nhlanhla Nene called for greater “synergy and cooperation” on Tuesday to resolve labour unrest and grow the economy.

“The commentary from the finance ministry has been a voice in a very, very dark room. They have realised the importance of making positive commentary instead of very vague snap judgements,” Francis added.

The strike looks set to continue on Wednesday as the union upped its wage demand, which does not bode well for a currency at its lowest levels in a week against the dollar.

Government bonds weakened alongside the local currency, with the yield for the bond maturing next year adding 1.5 basis points to 6.720 percent while the 2026 issue was up 2 basis points to 8.345 percent. - Reuters