South Africa Sees Gold Strike Unlikely as Platinum Lesson Learnt

South Africa learned lessons from a record platinum-industry strike last year that will help prevent a similar stoppage during gold-wage talks in 2015, Deputy Mineral Resources Minister Godfrey Oliphant said.

Pay negotations between labor unions and companies including AngloGold Ashanti Ltd., the world’s third-largest producer, are set to begin next month. Last year, about 70,000 workers at the local operations of the three biggest global platinum companies led a five-month stoppage that crippled output of the metal and contributed to the slowest pace of South African economic expansion since a 2009 recession.

A strike is “not likely” this year, Oliphant said in an interview in Vancouver. “Both for industry and labor, it was a hard lesson of that long strike of five months.”

The platinum stoppage was led by the Association of Mineworkers and Construction Union, which has displaced the National Union of Mineworkers as the biggest employee representative in the industry.

The NUM speaks for 57 percent of South Africa’s 100,000 gold employees and will hold a national bargaining conference on Wednesday and Thursday to discuss its demands. The AMCU represents 25 percent of gold employees, according to the chamber. It holds the majority of membership at the biggest mines operated by AngloGold, Sibanye and Harmony.

Bargaining Systems

The gold industry uses a collective-bargaining system in which producers, through the Chamber of Mines lobby group, negotiate with unions to reach agreements that apply across most pay grades at companies that are signatories to the accord. This differs from the platinum industry, where company-specific pacts are reached. In the metals and engineering sector, a bargaining-council arrangement applies to all employers in the industry.

While South Africa’s labor laws are able to deal with collective bargaining, they give “no limit” on the duration of the strike, Oliphant said.

South African Labor Minister Mildred Oliphant has met with unions about this, and consultations have taken place at the National Economic Development and Labor Council, set up by law to promote dialogue on labor-market policy and legislation.

“There has been a lot of cooperation from all parties,” Oliphant said. “All of us have the national interest at heart to ensure that we do not repeat the mistakes that have been made.”

By the time it ended in June, the platinum strike cost the companies 23.9 billion rand ($2 billion) in revenue and workers 10.6 billion rand in lost wages from its start on Jan. 23, according to the producers.

“What we are saying is, ‘What are the issues that people go on strike for?’ If we focus on those matters, then we are dealing with the real issues, rather than the symptoms,” Oliphant said.

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