South African Gold Mines See Unions Likely Accepting Pay Offer

The leaders of South Africa’s biggest gold producers said it’s likely unions will accept an improved pay offer as the industry looks to avert a repeat of a strike that crippled the world’s biggest platinum mines for five months.

Gold has dropped 10 percent since wage talks started June 22, touching a five-year low and hurting companies already contending with higher output costs. In the revised proposal, producers reduced their wage-deal term to three years from five and said they would increase basic pay by more than before.

“I think it’s extremely likely that they will accept,” Harmony Gold Mining Co. Chief Executive Officer Graham Briggs told reporters in Johannesburg Friday. “It’s a fair offer. It’s a final offer.”

A strike over pay halted most South African mines of the world’s three-biggest platinum operators from January to June last year.

“The appetite for anything similar to what happened in platinum is not very high,” Sibanye Gold Ltd. Chief Executive Officer Neal Froneman said.

AngloGold Ashanti Ltd. and Sibanye 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 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.

Percentage Increases

The revisions would mean increases of as much as 11 percent for Harmony’s lowest-paid workers and 13 percent for Sibanye and AngloGold employees in the first year, the companies said Friday. South Africa’s inflation rate was 4.7 percent in June.

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.

The National Union of Mineworkers, which speaks for about 52 percent of employees at the producers, 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 organization is disappointed with the offer, NUM General Secretary David Sipunzi said Thursday.

The NUM, Solidarity and UASA will respond to the proposal by Aug. 7, while the Association of Mineworkers and Construction Union said Aug. 4, Elize Strydom, the chief negotiator on behalf of the producers at the Chamber of Mines, told reporters Friday.

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