Shares in South African gold mining companies dropped in early trade on Monday as investors braced themselves for the start of what could be tough wage negotiations later in the day while a faltering bullion price added the bearish sentiment.
The talks, which include Africa’s top bullion producer AngloGold Ashanti, [DATA SGL:Sibanye Gold] and [DAT HAR:Harmony Gold], come at a time when the industry is grappling with depressed prices, falling production and rising costs.
The firms say high pay increases would lead to the decline of a struggling industry.
However, the sector’s biggest union, the National Union of Mineworkers (NUM), wants around 80 per cent pay increase for its lowest-paid members while the Association of Mineworkers and Construction Union seeking a more than two-fold increase.
By 0814 GMT, shares in [DATA ANG:AngloGold] had dropped 4.7 perc ent to 112.26 rand, Harmony lost 2 per cent to 16.57 rand and Sibanye Gold shed 3.9 per cent to 18.76 rand.
David Sipunzi, newly elected head of NUM, defended his unions wage demands in the ailing industry, saying miners were still being paid “apartheid wages.”
The talks will not involve [DATA GFI:Gold Fields] because it has already signed an agreement with the unions. It’s shares had fallen by 2.9 percent to 38.05 rand.
Gold eased from a near-four-week high on Monday, slipping below the $1,200 mark as possible signs of progress in Greek debt talks curbed safe-haven bids for the metal.