The second-biggest union at South African gold producers said the companies need to improve their pay offers or the labor group will leave the negotiations.
“Tomorrow if we’re not happy with the offer, we will declare a deadlock” in the talks, Manzini Zungu, a spokesman for the Association of Mineworkers and Construction Union, which represents 30 percent of gold employees, said by phone.
Companies including AngloGold Ashanti Ltd. have proposed a five-year deal with annual increases of as much as 13 percent, plus a share of earnings and improved job security and living conditions. The AMCU wants wages more than doubled for the lowest-paid employees. The inflation rate was 4.6 percent in May.
While keen to avoid a repeat of last year’s five-month platinum strike, the South African mining industry’s longest, the producers’ ability to raise salaries is limited by spiraling costs that have left much of the industry unprofitable.
The National Union of Mineworkers, which speaks for 52 percent of employees in the talks, rejected the first pay deal offered Monday. The Chamber of Mines, representing producers, will respond to the unions Wednesday, Livhuwani Mammburu, a spokesman for the union, said in a text message.
“If there’s no collective agreement stating at what point a dispute can be declared,” it can happen whenever the talks deadlock, Lusanda Myoli, a spokeswoman for the Commission for Conciliation, Mediation and Arbitration, said in an e-mailed response to questions.