S.Africa mine union plans to demand gold wage hikes of 75 pct - CNBC Africa

S.Africa mine union plans to demand gold wage hikes of 75 pct


by Reuters 0

Sources say South Africa mine union plans to demand gold wage hikes of 75 pct.

South Africa's National Union of Mineworkers (NUM) is planning to submit demands to the gold sector next week calling for a 75-percent hike in the basic pay for entry-level workers, according to union sources familiar with the matter.

"For the basic wage at the entry level, we are planning to demand a raise to 10,000 rand ($823) a month in the first year from 5,700 rand at present," said one NUM source, who asked not to be named. This was confirmed by a second source in the union.

That would set the stage for tough negotiations and a potentially protracted dispute with companies in South Africa's gold sector, where profit margins are under pressure.

The basic wage is not the only remuneration miners get, nor is it the only labour cost to companies. Miners also get various allowances structured into their pay packages.

NUM, which represents 57 percent of the workforce in the gold sector, said in March it might ask for increases of up to 100 percent in the gold, coal and diamond sectors, but was still finalising its demands.

The sources did not disclose the demands in the sectors outside of gold.

South Africa's mostly black mining labour force is increasingly restive two decades after the end of apartheid, with perceptions prevalent that the earnings which have been made in the industry have not flowed fairly to workers.

NUM is also competing for working-class hearts and minds with its arch-rival, the Association of Mineworkers and Construction Union (AMCU), which has poached tens of thousands of its members on the platinum belt in a violent turf war that erupted in 2012.

The new NUM wage demand plans would not affect Gold Fields, as the union signed a three-year deal with the company two weeks ago for a 21 percent increase for the lowest-paid workers to 7,000 rand.

But the NUM has upcoming talks with AngloGold Ashanti, Harmony Gold, and Sibanye Gold, whose two-year wage agreements with the union expire in June.

They will almost certainly baulk at big, double-digit demands at a time when inflation in Africa's most advanced economy is 4 percent and as they contend with depressed prices and rising power and labour costs.

Spot gold is currently fetching just over $1,190 an ounce, about 38 percent down from its historic peak of $1,920 scaled in September 2011, and South Africa's once towering bullion industry has long been in a state of steep decline.

Harmony has been battling to turn a profit and reported a headline loss of 496 million rand ($43 million) in the three months to Dec. 31, 2014.

AMCU, which is striving to make inroads in the gold sector and led a five-month strike last year in the platinum sector, is expected to submit its own gold wage demands next month.