AngloGold, Gold Fields Propose Higher Wages for Worst Paid

AngloGold Ashanti Ltd., Gold Fields Ltd. and Harmony Gold Mining Co., Africa’s largest producers of the metal, offered to raise the wages of their lowest-paid workers to try to curb wildcat strikes.

Terms for entry-level workers and other job categories have been reviewed, South Africa’s Chamber of Mines, an industry body that represents the three Johannesburg-based companies in wage talks, said in a statement yesterday. “It has recognized there are certain anomalies that need to be addressed,” it said.

The chamber met labor groups including the National Union of Mineworkers yesterday after the NUM called for the current two-year wage accord to be renegotiated. Workers have bypassed unions, calling directly on management for higher pay since Lonmin Plc miners won increases of 11 percent to 22 percent after an unauthorized strike. Inflation was 5 percent in August.

About 41 percent of South Africa’s gold output is idled, including all of AngloGold’s mines. Two Gold Fields sites were halted after workers walked out without heeding resolution procedures set out by labor laws, while miners have been absent from Harmony’s Kusasalethu operation since at least Oct. 3.

Most of Anglo American Plc’s platinum mines and its Kumba unit’s Sishen iron-ore complex are also shut because of strikes. Xstrata Plc’s Eland platinum mine and Samancor Ltd.’s chrome operations have been disrupted as workers demand higher pay.

Pay Proposal

The chamber has proposed a new allowance for rockdrill operators, it said, without elaborating. It’s also offering better pay for locomotive, loader, winch and water-jet operators and wage “adjustments” for other employees to “preserve the integrity of the current job grading framework.”

The NUM is holding meetings to discuss the proposals with workers today and expects an indication of their response by tomorrow, Lesiba Seshoka, a spokesman for the union, said by phone. NUM General Secretary Frans Baleni met with Gold Fields workers at the KDC West mine until late yesterday, he said.

AngloGold produced about 306,000 ounces in South Africa in the first quarter. Gold Fields’ KDC West and Beatrix mines produced about 212,200 ounces, while Kusasalethu yielded 39,256 ounces. The nation’s gold output was 1.35 million ounces in the quarter, according to the Chamber of Mines. It was the fifth-largest gold producing country in 2010, GFMS Ltd. data show.

Gold for immediate delivery declined by 0.2 percent to $1,761.43 an ounce by 5:23 p.m. in London trading.

Legal Walkouts

AngloGold, Gold Fields and Harmony ended legal strikes in August last year after agreeing to raise 2011 pay by 7.5 percent to 10 percent, depending on job category, and by the same amount this year. The chamber isn’t revising those increases, Elize Strydom, its chief negotiator, said today in an interview on Johannesburg-based SAfm radio. When the wage agreements were struck last year, there were outstanding issues earmarked for later talks. These are the points now being discussed, she said.

The unions will take the proposals to their members and respond to the chamber tomorrow, Strydom said today by phone. Adopting these plans will depend on workers reporting for duty by the close of business tomorrow, she said.

AngloGold and Gold Fields offered an additional 2 percent raise and Harmony 1.5 percent in categories four through eight this year, according to Strydom. Category three, the entry-level, would be eliminated in the proposal, meaning the lowest-paid workers would get a wage at the higher category.

The chamber supports a call by the Congress of South African Trade Unions for a commission of inquiry into living and working conditions in the country’s mining industry, it said.

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