Gold-Mining Unions Circle as South African Wage Round Looms

Updated on

South Africa’s biggest mining unions are seeing who will blink first as pay talks with the nation’s gold producers become the latest battleground for membership.

Both the National Union of Mineworkers, which represents 55 percent of about 100,000 gold industry employees, and its fast-growing rival, the Association of Mineworkers and Construction Union, are overdue in presenting their demands to companies including AngloGold Ashanti Ltd. and Sibanye Gold Ltd.

The AMCU, which led a five-month strike in South Africa’s platinum industry last year, speaks for about 28 percent of gold miners compared with 17 percent when the previous wage deal was reached in 2013, according to the Chamber of Mines. Tensions with the NUM, an ally of the ruling African National Congress, increased as the AMCU gained membership after police killed 34 striking workers at Lonmin Plc’s Marikana mine in August 2012.

“The ongoing power struggle between NUM and AMCU means that the trade unions are likely to explore any strategic advantage available,” said Paul Fouche, a lawyer at Fasken Martineau in Johannesburg. “The trade union which submits its demands last may get an opportunity to meet, exceed the demands of the other trade union or differentiate its demands.”

The NUM is still finalizing its demands, Livhuwani Mammburu, a spokesman for the union, said by phone on Wednesday. “They’re working out some final detail and will table them” to the Chamber of Mines, he said.

The lobby negotiates on behalf of producers including Sibanye, Harmony Gold Mining Co. and AngloGold. South Africa is the world’s sixth-biggest gold producer.

Gold Fields Deal

“We are not looking at someone” to go first, AMCU President Joseph Mathunjwa said about the wage demands in an interview at a May 1 rally. “Once we are ready, we’ll submit.”

Gold Fields Ltd. signed a three-year wage deal with NUM and the UASA union last month, noting that its mechanized South Deep operations give the company a different profile to the labor-intensive mines run by other producers.

Gold Fields’ lowest pay grades will get a 21 percent pay increase starting April 1, 15 percent the following year and 13 percent in 2016, the NUM said last month.

Mathunjwa told thousands of miners who filled a stadium on May 1 in Orkney, about 165 kilometers (103 miles) southwest of Johannesburg, that the AMCU’s agreement with the world’s largest platinum companies last year set a template for mining pay.

Platinum Template

“Don’t be fooled and think that NUM negotiated with Gold Fields,” he said. “They took the same agreement as the platinum one.”

Anglo American Platinum Ltd., Impala Platinum Holdings Ltd. and Lonmin signed a deal with the AMCU last June to increase basic pay by 1,000 rand ($84) a month in the first two years and by 950 to 1,000 rand in the third. That equated to an increase of 20 percent at Amplats for the first year.

“The platinum and Gold Fields deals have not set a benchmark, but it has raised the trade unions’ expectations in respect of the chamber negotiations,” Fouche said.

There could be demands to double entry-level wages, NUM Secretary-General Frans Baleni told reporters in Johannesburg on March 12.

It’s “quite early” to comment on potential demands and what’s affordable for the industry, said Charmane Russell, a spokeswoman for the gold companies. “Once the engagement begins there will be a lot more clarity,” she said.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE