S. Africa Union Says Gold Wage-Offer Gap Seems Too Wide to Close

South Africa gold producers and labor groups seem too far apart in pay talks to reach a settlement, according to the largest union representing workers in the industry.

The National Union of Mineworkers foresees an outcome to the talks where it will be granted a certificate of non-resolution from the Commission for Conciliation, Mediation and Arbitration, Lesiba Seshoka, a spokesman for the union, said in a phone interview. That would entitle the union to declare a work stoppage, with miners protected from dismissal.

“I smell a strike in the air,” Seshoka said.

Negotiations over wages stalled on July 24 after the unions rejected an offer of a 5 percent pay increase and a housing-related allowance. The dispute moved to mediation at the CCMA, which is scheduled to have a meeting with the sides tomorrow. That process can last as long as 30 days.

The Chamber of Mines, representing companies including AngloGold Ashanti Ltd. (ANG), the world’s third-largest producer, Gold Fields Ltd. (GFI), Harmony Gold Mining Co. Ltd. and Sibanye Gold Ltd. (SGL), raised its offer on Aug. 13 to 5.5 percent with additional compensation.

“The producers remain hopeful that a resolution will be achieved without resorting to industrial action,” Charmane Russell, a spokeswoman for the chamber, said in an e-mailed reply to questions. “Industrial action will be incredibly damaging for the industry, employers and employees, and South Africa as a whole.”

The CCMA process can be extended by agreement, she said.

The NUM has asked for a 60 percent increase in wages for entry-level jobs. It represents 64 percent of gold mining employees.

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

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