Gold Companies Improve Wage Offer to South African Unions

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South Africa’s biggest gold producers improved their wage offers in a final push to reach an agreement in talks that began in June.

AngloGold Ashanti Ltd. and Sibanye Gold Ltd. proposed to raise monthly pay for entry-level workers by 1,000 rand ($79) annually for the three years started July 1, 2015, they said Thursday in a statement. Harmony Gold Mining Co. offered a 500-rand increase. Basic pay is currently about 5,800 rand. Living-out allowances will be raised by 100 rand in the first year from 2,000 rand now.

“We believe this is a generous offer which is above inflation and at the limit of what this industry can bear whilst remaining sustainable,” Elize Strydom, chief negotiator for the companies, said in the statement. It is the “final offer,” she said.

Bullion has dropped 9.5 percent since wage talks started June 22, touching a five-year low and hurting companies already contending with higher output costs. Producers previously proposed a five-year wage deal with annual increases of as much as 13 percent, plus a share of profits, improved job security and living conditions.

The increase of monthly pay doesn’t translate into higher benefits, and the offer only applies if all four unions agree to it, the companies said.

Guaranteed Pay

The proposal means entry-level workers will have guaranteed pay, which includes allowances such as housing and medical retirement contributions, of between 12,800 rand and 13,200 rand a month in the accord’s third year.

All companies except Harmony offered miners, artisans and officials increases of 6 percent in the first year and either that or the inflation rate, whichever is larger, in subsequent years. Harmony proposed raising their pay by 4.6 percent.

The National Union of Mineworkers, the biggest labor group in gold, this month lowered its demand for basic pay to 9,500 rand. While that was 9.5 percent below its previous request, it’s still at least 60 percent more than current wages. The NUM speaks for about 52 percent of employees at the producers.

“We are disappointed with the offer,” NUM General Secretary David Sipunzi told reporters in Boksburg, east of Johannesburg. “It’s a myth that there can be job guarantees in the mining industry.” His union will take the proposal to members, he said.

The Association of Mineworkers and Construction Union, the second-largest labor group, wants entry-level pay more than doubled.

“At least they have moved,” Jimmy Gama, the AMCU’s treasurer, told reporters. The revised offer is a “positive step” and the union will take it to members for review, he said.

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