Africa's biggest steel maker ArcelorMittal South Africa has agreed to a 12 percent wage increase for its workers across the board, the National Union of Metalworkers of SA (Numsa) said on Monday.

revision The increase will be effective from the end of June.

Numsa said Mittal Steel also agreed to link increases for next year to the consumer price index (CPIX) plus one percent.

"The negotiators agreed to consider the negative effects of the ever rising headline consumer price index which shot up to 9.8 percent in February from 4.9 percent a year ago - without resorting to strikes."

"It is a historic agreement for it has established provisions to address among others, the critical shortage of skilled artisans by ensuring additional improvements on benefits, development and keeping qualified artisans," Numsa said.

Numsa said the agreement would improve employment conditions and wages of metalworkers which were affected by inflation.

It was also agreed that artisans would receive additional performance improvement increases, above the 12 percent, that would be decided upon soon, Numsa said.

The union said it hoped the spirit displayed by ArcelorMittal SA's management would influence other employers.