Gold Miners Set to Strike as S. Africa Work Stoppages Spread

South African gold producers are braced for a strike later today when National Union of Mineworkers members are due to add to 120,000 workers who have downed tools in other parts of the continent’s largest economy.

“Talks have continued with the unions, but we’re still anticipating a strike by the NUM,” Charmane Russell, a Chamber of Mines spokeswoman who works at Russell & Associates, said today by phone from Johannesburg.

The strike is expected to start at 6 p.m. as night shifts commence, Lesiba Seshoka, an NUM spokesman, said by phone.

Members of the NUM, which represents 64 percent of employees, will stop work after the chamber failed to meet demands for pay increases of as much as 60 percent for entry-level workers. The chamber, whose members include AngloGold Ashanti Ltd. and Sibanye Gold Ltd., made a final offer to boost pay by 6 percent to 6.5 percent for about 142,000 workers.

Strikes cut 0.5 percentage point off gross domestic product last year, when at least 44 people, including 34 killed by police in one day, died near the operations of Lonmin Plc, the third-largest platinum producer. Stoppages have already shaved 30 basis points, or 0.3 percentage point, off GDP this year, President Jacob Zuma said on June 13.

A protracted strike “is not helpful to the country,” Zuma told reporters today in Pretoria. The NUM strike isn’t raising tensions in the industry and is unlikely to spread, Mining Minister Susan Shabangu said in an interview in the capital.

‘Partially Operating’

The Association of Mineworkers and Construction Union, which represents 17 percent of gold miners at the pay talks, hasn’t accepted the producers’ wage offer, or indicated whether it will strike, Russell said.

AMCU members will report for duty, union President Joseph Mathunjwa said in a phone interview today. “There’s still an avenue, we’re still open to negotiation,” Mathunjwa said.

The AMCU is the biggest union at AngloGold Ashanti’s Mponeng, Harmony Gold Mining Co.’s Kusasalethu, and Sibanye Gold’s Driefontein operations. All three are close to Carletonville, about 80 kilometers (50 miles) west of Johannesburg.

Sibanye’s Driefontein will probably “at least be partially operating” in the event of a NUM strike, James Wellsted, a spokesman for the company, said by phone. The mine, Sibanye’s biggest, produced 271,100 ounces of gold in the six months ended June 30.

Some Production

“In respect of production, we will only know tomorrow, but we do believe that there will be some operations which are expected to continue,” chamber spokeswoman Russell said.

Trade union UASA, which represents 6.9 percent of workers, on Aug. 30 accepted the chamber’s offer, Russell said.

Without an agreement, producers have the option of applying for a certificate of non-resolution and locking out workers, which would be a “fairly drastic step,” Harmony Chief Executive Officer Graham Briggs said Aug. 29.

“A lockout will just a create an unsafe environment for everyone,” AMCU’s Mathunjwa said.

About 30,000 workers at plants operated by car manufacturers including Toyota Motor Corp., Bayerische Motoren Werke AG and Volkswagen AG have been on strike since Aug. 19, while 90,000 employees at building companies have stopped work.

The South African Police Service is “fully prepared to maintain stability in the country and to ensure that safety prevails during any intended strike action,” SAPS spokesman Solomon Makgale said yesterday in an e-mailed response to questions.

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