South African Gold Miners Ease Some Pay Demands as Strike Bites

Wednesday, 04 Sep 2013 07:16 AM

 

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South Africa's main mining union has offered to compromise on some of its demands for higher pay after launching a strike that hit production at most of the country's gold mines on Wednesday.

The stoppage called by the National Union of Mineworkers (NUM) began at the evening shift on Tuesday, with many miners refusing to go underground, producers said.

Production at 16 of the 23 mines currently involved in talks was partially or severely affected on Wednesday morning, the Chamber of Mines said. Affected companies include South Africa's main producers AngloGold Ashanti, Gold Fields, Harmony Gold and Sibanye Gold.

The stoppage is seen costing Africa's largest economy around $35 million a day in lost production, adding to the nation's economic woes as strikes over pay reduce output in other industries such as auto manufacturing.

On Tuesday, President Jacob Zuma had appealed to employers and unions to try to avert a strike in the iconic but waning South African goldmining industry, which once produced a third of the world's bullion but is now in rapid decline.

The nation's gold mines once accounted for close to 80 percent of global output but its deep and dangerous shafts now only produce 6 percent.

The NUM, which represents two thirds of miners in the gold sector, had offered the Chamber of Mines, which negotiates on behalf of employers, a more flexible position, a spokesman said.

"We said to them: 'If you are prepared to move, then we may be prepared to move,'" Lesiba Seshoka said in comments broadcast by SAFM radio.

But Seshoka later told Reuters the union still wanted a 60 percent increase in basic pay for entry-level underground workers, which would take it to 8,000 rand ($770) a month from 5,000 rand.

The employers' offer is for a 6.5 percent rise, just above the current inflation rate.

The union's demands also include 15 percent pay rises for all other categories of workers and it was in this specific area that the NUM was willing to show flexibility, Seshoka said.

"For entry-level workers we are still where we were. We have not budged. But from the 15 percent we may be prepared to go lower but will accept nothing below double digits," he said.

Charmane Russell, a spokeswoman for the producers, said there had been no formal revised offers from either side but they "have come much, much closer to finding one another."

In a sign of some progress, two junior gold producers, Village Main Reef and Pan African Resources, said they had reached wage agreements with NUM members in their workforces on salary increases of around 8 percent.

"LIVING WAGE"

The NUM's tough position regarding the lowest-paid workers is significant because it has been fighting to retain membership after losing tens of thousands of members to its hardline rival, the Association of Mineworkers and Construction Union (AMCU) in a union turf war that broke out last year.

The country's chamber of mines says about half of the lower-skilled gold mining workforce of 95,000 would fall into the entry-level category.

AMCU, whose members in the gold sector have not gone on strike yet, is seeking pay hikes of as much as 150 percent under the battle cry of a "living wage" and NUM has become more populist in a bid to fend off this challenge.

The conflict between the unions unleashed a wave of wildcat strikes that rocked South Africa's platinum and gold industries last year, dented economic growth and led to sovereign credit downgrades. More than 50 people were killed in the violence that ensued.

Tit-for-tat killings linked to the union rivalry still occur on the platinum belt, where AMCU is now the dominant union and is currently in or about to embark on tough wage talks with producers such as Impala Platinum and Lonmin.

© 2014 Thomson/Reuters. All rights reserved.

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