Anglo, Xstrata Coal Units Sign Pact to Raise S. Africa Wages

South African coal producers who are members of the Chamber of Mines, which represents companies including units of Anglo American Plc (AGL) and Xstrata Plc (XTA), agreed to raise wages for entry-level workers by 5 percent.

Anglo American Thermal Coal, Exxaro Resources Ltd. (EXX)’s Exxaro Coal Mpumalanga, Kangra Coal and Xstrata Coal will make the adjustment to so-called category four workers’ pay effective from Nov. 1, according to a copy of the agreement that was signed in Johannesburg today. The National Union of Mineworkers, Solidarity and UASA were the unions that signed the agreement.

“This is the result of collective bargaining’s best practice,” Solidarity General Secretary Gideon du Plessis said after the signing. The negotiations were part of a 2009-11 wage agreement.

Walkouts that began at platinum mines and spread to coal, gold, chrome, and iron-ore operations have cut production as mining companies grapple with rising costs.

Thermal-coal prices at Richards Bay, Africa’s biggest terminal for shipping the commodity, dropped on Nov. 2 to the lowest level since December 2009, according to data compiled by Bloomberg.

Anglo, Kangra Coal, Optimum Coal Holdings and Xstrata will make a one-time payment of 2,000 rand ($232) to workers in categories five to eight with the December payroll, it said.

Wages Strikes

Coal of Africa Ltd., a producer of the fuel in South Africa, will reduce costs after increasing wages to end a five- week strike, Chief Executive Officer John Wallington said at a mining conference in Johannesburg yesterday, declining to give details of the cost-cutting measures. The company started consultations on jobs at its Mooiplaats operations, Coal of Africa said in a statement.

The strike at the Mooiplaats colliery east of Johannesburg, which started Sept. 25, was called off by the National Union of Mineworkers on Oct. 30, the company said last week. A settlement with the union increases costs per ton of saleable coal by about 1 percent, Coal of Africa said.

Gold producers represented by the chamber signed an agreement with labor unions Oct. 25 covering changes to pay and job categories that will see workers getting increases of 3 percent to 11 percent on top of those contained in an existing two-year wage accord, according to the NUM. The deal also moves entry-level workers to a higher pay category.

To contact the reporter on this story: Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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