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South African Gold Mining-Companies Offer Workers 4% Increase

South African gold-mining companies offered workers a 4 percent increase in wages, less than inflation, because of spiraling costs amid a decline in the price of the metal, the Chamber of Mines said.

“It is clear that the gold-mining industry is facing significant challenges,” Elize Strydom, the chamber’s chief negotiator, said in an e-mailed statement from Johannesburg. “How will we overcome this? It is going to require good faith negotiations and a preparedness to give and take.”

Gold operators in South Africa, the world’s sixth-biggest producer of the metal, had faced demands from some unions to at least double pay of entry-level workers after the precious metal’s steepest quarterly price slump on record.

The Association of Mineworkers and Construction Union asked companies to more than double pay for entry-level workers, while the National Union of Mineworkers, which represents about 64 percent of employees in the industry, asked for wages to be raised by as much as 61 percent. The annual inflation rate was 5.6 percent in May.

Solidarity, speaking on behalf of 2.4 percent of miners, asked for a 10 percent average gain in pay, according to the chamber, which represents gold companies including AngloGold Ashanti Ltd. (ANG), the world’s third- biggest producer of the metal, in wage talks.

“The chamber would have to raise its offer dramatically to create the atmosphere for a settlement,” Solidarity General Secretary Gideon du Plessis said in an e-mailed statement. “Union members will also have to accept a lower-than-expected increase.”

The AMCU, which speaks for 17 percent of gold miners, today refused to sign a document outlining the rules of engagement for the wage talks, Du Plessis said.

Talks will resume on July 24, the chamber said.

To contact the reporter on this story: Andre Janse van Vuuren in Johannesburg at ajansevanvuu@bloomberg.net

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

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