The harsh realities of the gold mining industry of the 21st century appear to have fallen on stony ground, among unions pressing for pay rises, leaving the employers under pressure to come up with a counter offer Wednesday.
The majority National Union of Mineworkers wants an 80 per cent pay increase and its rival AMCU 100 per cent. Both rejected an offer this week from Harmony, Anglogold Ashanti and Sibanye of between 7.8 per cent and 12.96 per cent.
The Chamber of Mines spent Tuesday morning presenting the economics of South Africa’s gold mines in a bid to sway unions. In the presentation the employers said that the AMCU demand alone would add R6 billion, about half a million US dollars, to the wage bill of just one mine.
“If these increases are granted most of the mines will be under water. This could be the end of the mining industry,” says Elize Strydom, the chief negotiator for the employers.
Analysts warn that more than 20,000 jobs could be lost by the end of the year if hefty pay rises are granted. Already, the workforce in the gold mines has dropped from 180,000 to a mere 120,000 in the last ten years.
“If they do not come up with a counter offer tomorrow we will deadlock,” says Manzini Zungu, the spokesman for AMCU.
“We did not come here for al lecture on economics, we came here for pay negotiations.”
Wednesday will be the last day in the third round of pay talks that could drag on until September.
Wages make up 55 per cent of costs in gold mining.