Kumba Iron Ore Agrees 3-Year Pay Deal With South African Union

Kumba Iron Ore Ltd. agreed a three-year wage deal with its two main unions, raising remuneration for the lowest-paid workers as much as 10 percent annually.

Kumba, owner of Africa’s largest iron-ore mine, agreed with the National Union of Mineworkers and Solidarity to increases of 8.5 percent to 10 percent in the first two years and 7.5 percent to 9 percent in the third, Gert Schoeman, a spokesman for the Pretoria-based unit of Anglo American Plc, said today by phone. The agreement is effective from July 1, Schoeman said.

The pact brings wage deals reached without a strike between the NUM and South African mine employers to at least three this month. The Association of Mineworkers and Construction Union, which usurped the NUM as the dominant labor group at the largest platinum producers like Anglo American Platinum Ltd. and Lonmin Plc, in June concluded a deal after a five-month stoppage that caused the country’s economy to contract in the first quarter.

“Our members in Kumba still have faith and confidence in the NUM,” Lucas Phiri, the union’s chief negotiator at the company, said in an e-mailed statement.

The parties agreed to change the structure of the 10,000 employees’ salary packages to allow for higher basic pay, Schoeman said. The lowest remunerated workers, whose job-grading has been improved by one level, will see their basic pay rise an average 17 percent a year over the term of the accord, the NUM said.

The country’s annual inflation rate measured 6.6 percent in June, according to Pretoria-based Statistics South Africa.

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