Gold Mining Strike in South Africa to Start Sept. 3 Over Pay

The National Union of Mineworkers, which represents about 64 percent of gold miners in South Africa, will start a strike over pay from Sept. 3, the Chamber of Mines said.

The chamber has made a final offer to boost pay by 6 percent to 6.5 percent for about 142,000 workers covered by wage talks. The NUM wants starting salaries increased by as much as 60 percent. So far only UASA, which makes up almost 7 percent of gold miners, has said it’s ready to take the employers’ offer.

All four unions would have to accept the chamber’s offer according to the terms of the deal, which expired yesterday. Companies including AngloGold Ashanti Ltd. (ANG), the world’s third-largest producer, Sibanye Gold Ltd. (SGL), Harmony Gold Mining Co. and Gold Fields Ltd. (GFI) would be affected by a strike.

“Employers remain open to discussions,” the Johannesburg-based industry body said in an e-mailed statement today. Companies are making plans “to ensure the continuation of essential services” in anticipation of a strike.

UASA members are concerned about consequences from strike action including possible job losses and violence, Franz Stehring, head of mining for the union, said in an interview. “The overwhelming majority of our members accepted the offer under duress.”

‘Unlikely to Accept’

Entry-level underground miners earn 5,000 rand ($484) a month before housing allowances and bonuses, according to the chamber. The NUM wants this to rise to 8,000 rand. The Association of Mineworkers and Construction Union, the second-biggest gold-labor group, is demanding an increase to 12,500 rand a month. Solidarity wants 8.3 percent more.

“It’s totally unlikely that we will accept,” Solidarity’s General Secretary Gideon du Plessis said in a phone interview. “We will not do the work of any of the striking NUM members and will not participate in essential services” during the action, he said. Its members account for more than 2 percent of gold miners, according to the chamber.

The chamber has received formal notice from NUM of a strike starting on the night shift. Gold One International Ltd. (GDO) said it has also received a notice of a strike to start Sept. 3 at some of its South Africa operations. “Management has contingency plans in place,” the Sydney-based producer said in a statement issued via the Johannesburg Stock Exchange.

Workers in the automotive, construction and aviation industries are already on strike to demand pay increases in excess of an inflation rate of 6.3 percent in July.

‘Drastic Step’

“The gold industry is at stake and we believe part of South Africa is at stake,” Harmony Chief Executive Officer Graham Briggs said at a press conference in Johannesburg yesterday.

Without a pact, producers have the option of applying for a certificate of non-resolution and locking out workers. A lockout would be a “fairly drastic step,” Briggs said.

The six-member FTSE/JSE Africa Gold Mining Index has slumped 44 percent this year. It rose 1.9 percent by 3:34 p.m. in Johannesburg.

A strike could cost South Africa’s gold industry, the biggest in Africa, 349 million rand a day in lost revenue, according to the chamber.

The AMCU, representing about 17 percent of gold miners, is “still in touch with our constituencies” about how to proceed with negotiations, President Joseph Mathunjwa said in a phone interview today before the chamber announcement.

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

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