Mining unions to snap olive branch from employers - CNBC Africa

Mining unions to snap olive branch from employers

Special Report

by Chris Bishop 0

Mining bosses will try to mollify militant unions with a social package and pay linked to the gold price – they are likely to fail.

To say Africa’s the biggest gold mining industry at a crossroads in its 130-year history is almost an understatement. Next week, the employers will try to mollify militant unions with a social package and pay linked to the gold price – they are likely to fail.

On June 22, pay talks between the gold mines and 93,000 employees will open at Birchwood Conference Centre, in Boksburg, to the east of Johannesburg and will see rival unions - the National Union of Mineworkers and AMCU - sit together for the first time. The venue is a sign of the times; along with minority unions, Solidarity and UASA, there are 130 people who won’t fit into the offices at the Chamber of Mines in downtown Johannesburg.

There is a lot at stake as gold mining brings in billions of dollars in foreign currency as nearly half of all the gold in the world has been mined in South Africa and passed through the Rand Refinery in Germiston east of Johannesburg.

AMCU wants to double entry pay and the NUM wants an increase amounting to around 80%. The gold mining industry argues that costs, largely driven by the cost of power and wages, have increased 20% a year since the global recession of 2008.

On June 24, the employers will table it’s so called social compact plan – that is a package of welfare benefits and training.  It is unlikely that the employers will make an offer next week; when it comes it will be linked to the gold price.

"We want people to share in the good times when the gold price has gone and feel the pain when it goes down. If it does, there will be talks about pay with the workers with retrenchments as the last option. Everyone must remember that unemployment is very high in this country and once a job is lost in mining it is very difficult to get another one," Elize Strydom, the chief negotiator for the employers said.

The negotiators met with both major unions, the National Union of Mineworkers and AMCU, this week to float the plan.

"We don't need schemes, we want money now," AMCU leader Joseph Mathunjwa told a press conference this week.

"This is just another trick to try to confuse us. You have to understand we are representing people who are very impatient and do not want to wait 10 years for benefits, they want it now. Will the executives take a pay cut if the gold price goes down? ," a highly placed source in the NUM, who asked not to be named, said. 

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