South Africa Mining Union Unhappy With 13% Gold Pay Offer

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South African gold-mining companies’ above-inflation wage offers of as much as 13 percent are “poles apart” from workers’ demands for an 80 percent increase, according to the National Union of Mineworkers.

“As far as the increase in wages is concerned, they are very far from what we are demanding,” NUM General Secretary David Sipunzi said in Johannesburg after negotiations Monday. “The indication is that we might not even meet halfway with the employers and therefore they are pushing us towards a strike.”

AngloGold Ashanti Ltd., the world’s third-biggest producer of the metal, said it offered to raise entry-level workers’ pay by 13 percent starting July 1. Sibanye Gold Ltd. and Harmony Gold Mining Co. proposed 11 percent and 7.8 percent respectively. The inflation rate was 4.6 percent in May.

The offers were “underpinned by the concept of sustainability,” Elize Strydom, the companies’ chief negotiator, told reporters. Jobs would be preserved so long as “economic drivers” such as the gold price remained the same, she said.

The NUM, the industry’s biggest labor group, wants basic pay to be raised to at least 10,500 rand ($854) monthly from about 5,700 rand.

South Africa’s gold producers want to stem rising costs that have left half of the industry barely breaking even or unprofitable, according to the Chamber of Mines, a lobby group for producers. Instead, they’re attempting to offer improved job security and living conditions as part of the talks to avoid a repeat of last year’s five-month strike by platinum workers.

“There are no jobs guaranteed in the mining industry,” Sipunzi told reporters. “They always retrench, so we cannot be fooled by those promises.”

The Association of Mineworkers and Construction Union, which led the platinum strike and is the second-largest in the gold industry, has asked for entry-level wages be more than doubled to 12,500 rand a month. AMCU spokesman Manzini Zungu declined to comment on the companies’ pay offers.

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