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S. African Union Wants Underground Miners’ Pay More Than Doubled

June 25 (Bloomberg) -- South Africa’s Association of Mineworkers and Construction Union wants underground employees’ pay more than doubled as the industry prepares for wage talks. This is 56 percent more than demands from a rival labor group.

The AMCU is seeking a minimum entry-level salary of 12,500 rand ($1,250) for underground miners, according to a copy of a letter to the Chamber of Mines, which represents producers. That compares with the current minimum of 5,000 rand and is more than the increase to 8,000 rand sought by the National Union of Mineworkers for that category. About 85 percent of employees work below the surface.

“Mineworkers experience a declining standard of living and the dream of sharing in the wealth of the country remains a pipe dream,” AMCU General Secretary Jeff Mphahlele said in the letter. “The minerals of this country must now benefit the people as per our constitution.”

The AMCU, representing about 17 percent of workers, is the biggest union in the nation’s gold industry after the NUM, which speaks on behalf of 64 percent of gold miners, according to the chamber. Demands for above-inflation wage gains put pressure on companies already contending with falling gold prices and rising costs, as well as persistent rivalry among the mining unions that has contributed to some of the worst labor violence in the country since the end of apartheid.

The entry-level monthly base wage for surface workers at gold mines is 4,350 rand, according to the website of the Chamber of Mines, which is due to take part in pay talks starting mid-July. With benefits, underground employees currently earn about 10,260 rand, according to the chamber. The NUM wants surface workers to be paid 7,000 rand, while the AMCU is seeking an increase to 11,500 rand.

AngloGold, Sibanye

Charmane Russell, a spokeswoman for the chamber, declined to comment today. AngloGold Ashanti Ltd., the world’s third-biggest producer of the precious metal, Gold Fields Ltd., Harmony Gold Mining Ltd. and Sibanye Gold Ltd. are among companies that belong to the chamber.

The UASA and Solidarity unions, representing workers in higher-skilled categories, have proposed wage increases of 18 percent and 14 percent, respectively.

The AMCU has also asked for the number of job categories to be reduced. “The gap between the low wage earners and the high wage earners have widened significantly,” the union said. Some categories are filled on the basis of race, it said.

The AMCU demanded an increase in housing allowances to 6,500 rand a month, while NUM is asking for an increase to 8,000 rand. The changes should be effective from July 1 this year, AMCU said.

The FTSE/JSE Africa Gold Mining Index fell 2.8 percent today, extending the drop to 46 percent this year. The price of gold for immediate delivery slipped 0.5 percent to $1,276.37 by 4:22 p.m. in Johannesburg.

To contact the reporters on this story: Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net; Tshepiso Mokhema in Johannesburg at tmokhema@bloomberg.net

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

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