South Africa Gold Miners Offered Better Wages

October 11, 2012 at 08:30

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South Africa’s leading gold mining companies have submitted proposals to unions to improve miners’ wages in an attempt to end illegal strikes that are costing the industry millions of dollars.

Under the proposals, AngloGold Ashanti, Gold Fields and Harmony Gold, say they are willing to raise the entry level grade for miners, give an additional “allowance” to rock drill operators and improve the packages of other categories of miners.

An industry official said that the companies agreed to the proposals with the understanding that it would not increase their overall wage bills by more than 3 per cent and would not break existing salary agreements.

Elize Strydom, a senior executive at the Chamber of Mines, which has been central to the negotiations, told the FT that the unions had until 11am on Thursday to report back with the deadline for workers to return to work by nightshift on that evening.

In return, the mining houses are hoping to receive commitments to improve production.

Unions, including the dominant National Union of Mineworkers, were to brief workers on the proposals.

There was scepticism about whether the proposals would be accepted in the current climate, with workers pushing for increasingly radical demands and eschewing their traditional labour representatives, including the NUM.

If the proposals are rejected companies would have to look at other options, including opening wage negotiations, dismissing illegally striking workers or retrenchments, Ms Strydom said.

“It is critical that all the parties show leadership in restoring stability to the mining industry,” added Ms Strydom. “This is important not only for the companies, the unions and the mineworkers, but also for the economic and social well-being of the country.”

AngloGold, the world’s third-largest producer of gold by sales, has been forced to halt work at its entire operations in South Africa since September 25, with about 24,000 of its 35,000 workforce downing tools. It has said that the unrest is costing it the equivalent of about 30,000 gold ounces a week in lost production.

Gold Fields has strikes at two mines employing 24,000 people, while Harmony has a strike at one of its mines that accounts for about 14 per cent of its total production.

In total 100,000 miners have been caught up in strikes across the mining sector, amid warnings that the wildcat action and any additional cost burdens will accelerate the closure of mines operating on tight margins and lead to job losses.

The unrest began in August when workers at Lonmin, the London-listed platinum company, downed their tools. That strike lasted six weeks and was marred by violence in which at least 45 people were killed.

That dispute was resolved after Lonmin agreed to wage increase of up to 22 per cent, fuelling similar demands from other workers as the strife spread.

Anglo American Platinum, the word’s leading platinum producer that has been forced to suspend operations at mines that account for about 40 per cent of its production, has led the way in companies taking a tougher stance.

Last week, it dismissed 12,000 illegally striking miners, about a fifth of its total workforce in what is seen as a test case for the industry.

Others have followed suit this week. Gold One fired the majority of its 1,900 workers at its Ezulwini operation, and Atlatsa Resources, a platinum miner, sacked 2,000 illegal strikers.