South Africa’s mines ministry is meeting producers and unions for two days of talks on alternatives to cutting as many as 10,000 jobs as companies face higher costs and low prices for their output.
At least seven mining and metal companies have announced plans to reduce their workforces in the world’s biggest platinum and manganese producer in the past two months. The second-largest union in the gold industry has rejected an offer by operators after almost two months of talks as the metal trades close to a five-year low. One in four South Africans is unemployed.
“We need an honest, frank conversation about what each one needs to do to arrest the current crisis,” Mineral Resources Minister Ngoako Ramatlhodi told reporters Wednesday in Pretoria, the capital. “None of us should leave this meeting without committing something to the table. It is not an exercise in finger-pointing.”
Talks over wages between the country’s largest gold producers and unions need to consider the future job security of workers, Ramatlhodi said.
The Association of Mineworkers and Construction Union, the second-biggest representative of gold employees in the talks, has rejected an offer by Sibanye Gold Ltd. and AngloGold Ashanti Ltd. to raise monthly pay for entry-level workers by 13 percent in the first 12 months of a three-year deal. The inflation rate was 4.7 percent in June.
Some members of the National Union of Mineworkers, the largest representative of gold employees, aren’t accepting the proposals, according to a person familiar with the discussions. The NUM has yet to announce its official stance.
The NUM lowered its demand last month for basic pay to 9,500 rand. Still, that’s at least 60 percent more than the current wage of about 5,800 rand monthly.
“I’m appealing to the companies to be transparent and I’m appealing to the unions to negotiate with reasonable prudence,” Ramatlhodi said. “They’ve got to approach this issue on the basis that we need to save jobs while we don’t need to accept slavery wages.”
The ministry is pursuing separate talks with Glencore Plc’s Optimum Coal unit over the suspension of its mining license due to non-compliance with labor regulations, Ramatlhodi said.
Optimum’s license was suspended Tuesday as the coal producer said it would seek bankruptcy protection due to an unprofitable supply deal with power utility Eskom Holdings SOC Ltd. Optimum also cut jobs amid a slump in coal prices.
“We are asking and assisting on a particular process to resolve the downscaling issues,” he said. “It is not in our interest that it gets shut down.”
The Chamber of Mines, the industry’s lobby group, is taking part in the talks to help find ways to minimize job cuts, President Mike Teke told reporters.
“We don’t go out and shed jobs because we like shedding jobs,” Teke said. “We’d like this meeting to come up with something constructive.”