South Africa’s Biggest Gold Union Snubs Producers’ Pay Offer

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South Africa’s biggest gold-mining union rejected the first pay offer presented by the companies, sticking to its demand for an increase of more than 80 percent.

“We want the money,” Livhuwani Mammburu, a spokesman for the National Union of Mineworkers, or NUM, said Monday. It has called on producers to raise basic pay for underground workers to 10,500 rand ($846) a month from about 5,700 rand now.

Companies including AngloGold Ashanti Ltd. and Harmony Gold Mining Co. have proposed a five-year wage deal with annual increases of as much as 13 percent, plus a share of profits and improved job security and living conditions. While keen to avoid a repeat of last year’s five-month platinum strike, their ability to raise salaries is limited by spiraling costs that have left much of the industry unprofitable.

Unions met Monday with the Chamber of Mines, which represents the gold companies, after consulting members on the initial offer made last week.

NUM members have given the union a mandate to reject the proposal, Mammburu said in a text message. Employees also don’t want a five-year term but might consider a three-year deal, he said. The union wants basic pay for above-ground employees of 9,500 rand and a 15 percent increase for all other categories. South Africa’s inflation rate was 4.6 percent in May.

Union Snub

The Association of Mineworkers and Construction Union, which speaks for about 30 percent of gold employees, also snubbed the producers’ proposal, as did the two other unions involved in the negotiations.

While their opening offer was “good,” it still needs work, UASA, which represents higher-skilled employers and managers, said earlier on Monday. The Solidarity union said in a statement that the chamber needs to heed its claims.

“In large part, all four unions retained their demands without any movement,” Charmane Russell, a spokeswoman for the producers, said by e-mail. Talks will continue on Tuesday as the “companies remain committed to reaching agreement based on the sustainability of the industry and the retention of jobs,” she said.

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