Africa’s Biggest Gold Mining Union Begins Strike

The National Union of Mineworkers, representing almost two-thirds of gold miners in South Africa, began a strike over a wage dispute.

NUM members have begun their protest, Charmane Russell, a spokeswoman for the Chamber of Mines, said today by phone. The chamber represents seven gold companies in wage talks. Most workers walked out at Gold Fields Ltd. (GFI)’s South Deep mine, said Sven Lunsche, a company spokesman.

The companies had made a final offer to raise the pay of about 140,000 workers by 6 percent to 6.5 percent, Harmony Gold Mining Co. Chief Executive Officer Graham Briggs said Aug. 29. The NUM wants as much as a 60 percent increase in starting salaries.

Strikes may cost the industry about 349 million rand ($34 million) a day in revenue, with the total cost of the action including lost wages and taxes reaching 597 million rand a day, the chamber says. Workers in the automotive, construction and aviation industries have already gone on strike to demand pay gains in excess of the inflation rate of 6.3 percent in July.

Entry-level underground miners earn 5,000 rand a month before housing allowances and bonuses, according to the chamber.

The NUM is seeking a jump to 8,000 rand, the Association of Mineworkers and Construction Union, the second-biggest labor group representing gold miners, is demanding an increase to 12,500 rand a month, and Solidarity wants an 8.3 percent gain.

UASA, a group that represents almost 7 percent of gold miners, is the only union that said it’s ready to take the employers’ offer.

`Last Resort'

Solidarity, representing more than 2 percent of employees, won’t do the work of any striking NUM members or participate in essential services, during the biggest union’s action, General Secretary Gideon du Plessis said in an Aug. 30 interview.

The AMCU, whose members make up about 17 percent of workers in the gold industry, is in talks with them over what action to take, President Joseph Mathunjwa said in a phone interview. “A strike, to AMCU, is the last resort,” Mathunjwa said.

The FTSE/JSE Africa Gold Mining Index is down 43 percent in 2013.

Unions declared a dispute with coal producers on Aug. 12 and their negotiations have moved into arbitration.

Among South African mining industries, coal is the least at risk of strikes, with a 50 percent chance of action, compared with 60 percent in the platinum business, Mark Rosenberg, an Africa analyst at Eurasia Group, said in an Aug. 28 report.

To contact the reporters on this story: Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net; Sonja Elmquist in New York at selmquist1@bloomberg.net

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

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