By Jon Herskovitz

DURBAN, Sept 23 (Reuters) - South Africa's ruling AfricanNational Congress debated policies on Thursday to address acurrency that is at 2-1/2-year highs and unemployment thataffects at least one worker in four.

The group that enjoys virtual one-party rule in Africa'sbiggest economy has shied away from calls from left-leaningfactions to drastically devalue the rand and also from takingthe advice of economists who say it must add flexibility to arigid and expensive labour market.

Delegates at a top-level, closed-door party meeting saiddebate on nationalising mines in the resource-rich country hasbeen a heated topic of discussions.

The ANC's youth wing has called for nationalising mines, butANC leaders said any policy on increased state ownership wouldnot be made until at least 2012, when the party holds its nextmajor meeting.

"The Youth League refused to back down on the their callsthat nationalisation should be discussed, which caused a lot oftension in the committees," said an ANC member from Johannesburgwho is attending the week-long conference.

The party's economic transformation commission will reportlater in the day on its findings to the plenary session of theANC's National General Council, one of its biggest politicalevents in years and where it adjusts its policy priorities.

President Jacob Zuma told the opening session on Monday hewanted to see a "stable and competitive" currency while a seniorofficial said the party did not want to see any major swings inthe rand.

The rand has been strengthened by foreign inflows into SouthAfrica's relatively high yielding bonds and other assets asinvestors seek higher returns than they can get elsewhere.

The rand has gained almost 26 percent since the start of2009 and it pierced the key 7.00 level to touch 6.98 onWednesday, gains that will unsettle policymakers at the centralbank and in government.

The International Monetary Fund on Tuesday said the randcould be overvalued by between 5 to 15 percent and reservesaccumulation should continue.

"POLITICAL MEDALS"

The ANC, unlikely to want to antagonise governing partnerssuch as union federation COSATU, is unlikely to adopt measuressuggested by economists that would make it easier for employersto hire temporary workers or sack unproductive ones.

A top COSATU official reminded the ruling party that hisorganisation wants to have a say in policy formation.

"We have no doubt that the ANC, in recognition of thereality that we have political medals hanging round our necksbut no economic jewellery, will take forward the pro-poor andpro-development ... resolutions," Secretary General ZwelinzimaVavi said at a union rally.

The ANC has called for "education, training, and skillsdevelopment" to provide more job opportunities in South Africawhere unemployment is running at around 25 percent.

Average wages in South Africa are about four times what cityworkers make in China and are much higher than in otherdeveloping countries, deterring investment. Frequent strikeshave exacerbated the problem.

Relations between COSATU and the ANC have been strained by astrike through most of August by about 1.3 million state workersand complaints from the labour group about what it sees asgrowing cronyism in the government.

Zuma has tried to mend fences with COSATU at the meeting. Heneeds the help of its vote-gathering machine as South Africaheads into nationwide elections for all local posts in the firsthalf of next year.

Eight ANC Commissions, including one proposing rules thatwould place new limits on the media, will report to the plenaryon Thursday and their findings will be released on Friday. (Additional Reporting by Peroshni Govender; Editing by GilesElgood)