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Striking S. Africa Gold Miners Return to Work on 8% Offer

Photographer: Mujahid Safodien/AFP via Getty Images

Agreeing to the proposal brings nearer the end of a two-day strike that may have cost the industry as much as 349 million rand ($34 million) a day in sales, according to the Chamber of Mines, which represents producers. Close

Agreeing to the proposal brings nearer the end of a two-day strike that may have cost... Read More

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Photographer: Mujahid Safodien/AFP via Getty Images

Agreeing to the proposal brings nearer the end of a two-day strike that may have cost the industry as much as 349 million rand ($34 million) a day in sales, according to the Chamber of Mines, which represents producers.

More than 60,000 South African gold miners began resuming work last night after a 48-hour strike as they accepted an 8 percent pay increase from companies including AngloGold Ashanti Ltd. and Sibanye Gold Ltd.

The increase to 5,400 rand ($540) a month for entry-level pay is 33 percent below the 8,000 rand demanded by the National Union of Mineworkers, which represents two-thirds of gold miners. The offer has been accepted by most NUM members, except those working at some of Harmony Gold Mining Co.’s mines, spokesman Lesiba Seshoka said.

Agreeing to the proposal brings nearer the end of a strike that may have cost the industry as much as 349 million rand ($34 million) a day in sales, according to the Chamber of Mines, which represents companies. The Association of Mineworkers and Construction Union, an NUM rival that speaks for 20 percent of the industry’s 107,000 gold employees, is yet to see the offer and is meeting Sept. 8 to discuss its response, President Joseph Mathunjwa said. The AMCU has asked for 12,500 rand a month.

The wage deal is “a little more than employers would have preferred,” the chamber’s chief negotiator, Elize Strydom, said in the statement. “The agreement has helped us prevent a longer period of damaging industrial action and remains a reasonably balanced outcome in terms of affordability and jobs preservation.”

Workers ‘Happy’

“The workers themselves are saying they are happy,” Seshoka said.

Employees who are not entry-level or rock drill operators will receive a 7.5 percent increase backdated to July 1, the chamber said in an e-mailed statement. Inflation-linked increases from July 2014 and a housing allowance increase to 2,000 rand from 1,640 rand are also included in the agreement, the chamber said.

South Africa’s annual consumer price inflation rate was 6.3 percent in July, according to data compiled by Bloomberg. Sibanye CEO Neal Froneman said any increase above CPI isn’t sustainable in the long-run on Aug. 13.

AngloGold’s six mines reported normal shifts, according to the NUM’s Seshoka and an update posted on the chamber’s website. The company is focusing on resuming output safely, it said in a statement. Two of Sibanye’s three sites are operating today and the remaining mine will resume operations this evening, spokesman James Wellsted said.

Pay Demands

The NUM called a strike on Sept. 3 after employers failed to meet pay demands for as much as 60 percent more than the current 5,000 rand a month of entry-level pay.

The chamber said Aug. 29 that its offer for a 6 percent to 6.5 percent raise was final.

Gold production is still being hindered by the pay dispute. Ten of Harmony’s 11 operations continue to be affected by the strike, Marian van der Walt, a spokeswoman, said by phone. Workers at Gold Fields Ltd.’s South Deep mine aren’t yet back at work, Sven Lunsche, a company spokesman, said by phone, adding that they may report for duty later today.

Mines where the AMCU has the biggest membership continued to operate normally, the chamber said. The AMCU is the largest union at AngloGold’s Mponeng, Harmony’s Kusasalethu and Sibanye’s Driefontein sites. The three mines are the companies’ biggest South African operations.

The AMCU is bound to accept the wage deal agreed by NUM members at mines where it is the minority labor representative Mathunjwa said. It isn’t compelled to agree to the proposal at Mponeng, Kusasalethu and Driefontein, he said.

This week’s strike may cost the industry about 597 million rand a day in sales, lost wages, and taxes, the chamber says.

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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