South Africa’s Mines Union to Ask for Double-Digit Pay Rise

The National Union of Mineworkers, an ally of South Africa’s ruling African National Congress, said it will ask for a double-digit increase in pay when negotiating with the Chamber of Mines in May.

The demand will apply across the mining industry, NUM’s Secretary-General Frans Baleni said by mobile phone today. “We will try to conclude the negotiations before July 1,” he said.

With industrywide wage talks looming, tensions between labor groups are intensifying. Lonmin Plc (LON) ended a six-week strike at Marikana last year by agreeing to pay increases for workers of 11 percent to 22 percent. Strikes in 2012 spread from platinum to gold and coal mines, costing Africa’s biggest economy 4.5 billion rand ($494 million).

The union was founded in 1982 by workers including Cyril Ramaphosa, who went on to lead the biggest-ever strike in the country’s gold industry five years later and is now the richest black South African after Patrice Motsepe, according to the Johannesburg-based Sunday Times. The NUM vies with the National Union of Metalworkers to be the biggest in the Congress of South African Trade Unions, which has been in alliance with the ANC since the first all-race elections in 1994.

Making Profit

“A couple of companies are making profits,” Baleni said, adding that the union is keeping track of fluctuations in commodity prices.

Platinum prices have declined 5.9 percent and gold has retreated 8.5 percent this year, data compiled by Bloomberg show. South Africa produces three-quarters of the world’s platinum output.

Gold, coal and most of platinum producers’ wage agreements will expire at the end of June, Elize Strydom, senior executive for employment relations at the Johannesburg-based Chamber, said April 18 in an e-mailed response to questions.

“The AMCU indicated that it would reflect on the Chamber’s proposal and reasons given for the proposal and would revert formally,” Strydom said.

The NUM is losing support to other organizations including the Association of Mineworkers and Construction Union, which is the biggest representative of workers at Lonmin, Anglo American Platinum Ltd. (AMS) and Impala Platinum Holdings Ltd. (IMP), the three largest producers, according to preliminary figures from the companies. South Africa has the world’s biggest known reserves of the metal.

The AMCU and management of platinum companies met on March 15 to explore the possibility of negotiating directly with the Chamber, which is the case in gold and coal industries, instead of holding talks at the company level, according to Strydom.

The union will be holding discussions with the Chamber of behalf of its 310,000 members, according to Baleni.

“I can’t say if we are going to strike or not,” he said. “It depends on the outcome of the negotiations.”

To contact the reporters on this story: Kamlesh Bhuckory in Johannesburg at kbhuckory@bloomberg.net; Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net

To contact the editors responsible for this story: Simon Thiel at sthiel1@bloomberg.net; Paul Abelsky at pabelsky@bloomberg.net

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