South African Gold Companies Increase Security Before Strikes

South Africa’s gold producers are ramping up security at their operations as the biggest union in the industry prepares to strike over wages.

Members of the National Union of Mineworkers, which represents 64 percent of employees, will stop working tomorrow evening after the Chamber of Mines failed to meet demands for wage increases of as much as 60 percent. The chamber, which represents seven gold companies including AngloGold Ashanti Ltd. (ANG) and Sibanye Gold Ltd. (SGL), has made a final offer to boost pay by 6 percent to 6.5 percent for about 142,000 workers.

The gold producers have been making security preparations for “some months” in anticipation of a possible strike, Charmane Russell, an external spokeswoman for the chamber at Russell & Associates, said by phone from Johannesburg. “They had a massive increase in security and planning. There is also very strong coordination with the police at a local and national level.”

Deputy President Kgalema Motlanthe brokered a pact between unions and companies to negotiate peacefully on July 3, which the NUM signed. Strikes cut 0.5 percentage point off gross domestic product last year, when at least 44 people, including 34 killed by police in one day, died near the operations of Lonmin Plc (LMI), the third-largest platinum producer. Stoppages have already shaved 30 basis points, or 0.3 percentage point, off GDP this year, President Jacob Zuma said on June 13.

Members of the NUM won’t force other employees to go on strike, spokesman Lesiba Seshoka said by phone.

“If you’re on strike, you’re on strike; if you’re not on strike, you’re not on strike,” Seshoka said.

AMCU Decision

It’s unclear whether mines where the Association of Mineworkers and Construction Union represents a majority of workers will also come to a standstill when the NUM’s strike begins, Russell said.

The AMCU is the biggest union at AngloGold Ashanti’s Mponeng, Sibanye Gold’s Driefontein and Harmony Gold Mining Co.’s Kusasalethu operations. All three mines are located close to Carletonville, about 80 kilometers (50 miles) west of Johannesburg.

The union was still in discussions with members over a possible strike, its president, Joseph Mathunjwa, said on Aug. 30. Mathunjwa wasn’t available for comment when contacted by phone today.

Trade union UASA, which represents 6.9 percent of workers, on Aug. 30 accepted the chamber’s offer, Head of Mining Franz Stehring said by phone.

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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