Biggest South African Gold Unions Say Wage Talks ‘Collapse’

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The two biggest unions at South African gold-mining companies said wage negotiations have broken down, bringing the industry closer to a strike.

“The talks have collapsed in the sense that the Chamber of Mines has gone back to the original offer,” David Sipunzi, secretary general of the National Union of Mineworkers, the largest labor group at gold mines, told reporters in Johannesburg on Thursday. “If the attitude remains the same, we cannot rule out a strike.”

A strike would add to pressure on South Africa’s mining industry, already hurting from lower commodity prices and facing job cuts. A five-month work stoppage at platinum mines helped cut economic growth to 1.5 percent last year, the slowest pace since a recession in 2009. Gold dropped 5.7 percent this year and is trading near a five-year low.

Sibanye Gold Ltd. and AngloGold Ashanti Ltd., the world’s third-largest producer, proposed on July 30 to raise monthly pay for entry-level workers by 1,000 rand ($78) annually for the three years starting July 1. Harmony Gold Mining Co. offered a 500-rand increase. Basic pay is currently about 5,800 rand.

The unions wanted increases that would draw benefits such as pensions, and the cash component was reduced in order to do so, said Elize Strydom, chief negotiator for the Chamber of Mines, which represents mining companies. The latest deal isn’t the same as the initial offer as it boosts a living-out allowance and is for three years instead of five years, she said.

The companies have reverted to the so called “firm offer” made June 29, which proposes entry-level employees receive wage increases of as much as 13 percent, the chamber said in a statement.

“Our members can’t afford to take these peanuts that they’re putting on the table,” said Jimmy Gama, treasurer of the Association of Mineworkers and Construction Union. The only route left for workers now is to go for mediation at the Commission for Conciliation, Mediation and Arbitration, he said.

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