South African Union Says Opening Gold Wage Offer Needs Work

Updated on

South African union UASA said while gold producers tabled a “good opening offer” in pay negotiations last week, it still needs work.

Labor groups will meet Monday with the Chamber of Mines, which represents AngloGold Ashanti Ltd., Harmony Gold Mining Co. and Sibanye Gold Ltd., after consulting with their members on the initial proposal, Franz Stehring, head of mining at UASA, said by phone Monday. The producers offered wage increases of as much as 13 percent, plus a share of profits.

The proposed five-year deal is “too long,” said Stehring, adding that virtually unchanged housing allowances and increases not linked to inflation were also issues. The centralized negotiations in Johannesburg with producers also include the National Union of Mineworkers, which represents most gold miners and is demanding an 80 percent increase in basic pay.

“The answer to the chamber from our side will be ‘go back and redo your figures,’” said Stehring, whose UASA comprises about 7 percent of the 95,000 employees involved compared with 52 percent for the NUM.

Members of the Association of Mineworkers and Construction Union, which represents 30 percent of employees in the industry, are firm about their demand of 12,500 rand ($1,007) a month, Manzini Zungu, a spokesman for the union, said in a text message.

The companies have guaranteed employment if their profit margin at operating-unit level, after the allocation of all costs, doesn’t fall below a margin of 6 percent.

The offer by producers is unprecedented from previous wage negotiations by starting with “a guarantee in terms of job retention,” Dawie Mostert, a senior vice president at Sibanye, said at a presentation Thursday. “The essence of what we’re trying to do here is job retention on the back of a sustainable industry.”

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