Strike Risk Rises as Union Snubs South Africa Gold Pay Deal

  • AMCU calls offer by producers including AngloGold `pathetic'
  • Largest union NUM, two others have accepted pay proposals

The risk of a strike by workers at South African gold mines increased after the second-biggest union in the industry rejected a pay offer even as the largest accepted it.

The wage proposals by producers including AngloGold Ashanti Ltd., the world’s third-biggest miner of the metal, are “pathetic,” Association of Mineworkers and Construction Union Treasurer Jimmy Gama said. The union, which speaks for 31 percent of gold employees, has a certificate of non-resolution from the Commission for Conciliation, Mediation and Arbitration and members will decide whether to go on strike, he said. The National Union of Mineworkers, which represents 52 percent of miners, earlier accepted the offer.

AngloGold, Sibanye and Harmony Gold Mining Co. have sought to avoid a repeat of last year’s five-month strike at platinum mines that crippled output, stifled economic growth and led to job losses. Gold has fallen 42 percent from a June 2011 peak, and the largest producers in South Africa, whose mines are the deepest and among the oldest in the world, are losing money on about 35 percent of production at current prices.

South African Gold Mines

“AMCU is the strongest union in the most important operations of these three employers,” Gama told reporters east of Johannesburg Friday. “We are controlling the main production areas of these employers. When AMCU decides to go on strike, I can tell you that there will be no production coming out, even if these other unions do not do so.”

The NUM, together with smaller unions UASA and Solidarity, signed the deal for AngloGold and Harmony workers. Sibanye hasn’t yet signed because its condition that all four unions agree to the offer wasn’t met, Chief Executive Officer Neal Froneman said in a statement.

“Feedback from Sibanye employees suggests that the majority of employees, including AMCU members, are in favor of accepting the current offer and the company will continue to engage with AMCU in order to reach an agreement,” he said. “We will not be adjusting or increasing this offer.”

The NUM will revert to its demand of a more than 80 percent increase at Sibanye and explore legal action, General Secretary David Sipunzi told reporters. “It’s never been heard of in the history of the industry that the company is refusing to sign the agreement after the unions agree to their offer,” he said.

Not Protected

Gold climbed 2.3 percent to 1,138.70 an ounce by 4:37 p.m. in London.

A strike at AngloGold and Harmony wouldn’t be protected once the three unions sign the agreement, Elize Strydom, the chief negotiator at the Chamber of Mines lobby group, told reporters. This means workers risk losing their jobs if they aren’t at work.

At Sibanye, the largest producer of South African bullion, an AMCU strike could be protected. The NUM represents 43 percent of employees at Sibanye, while AMCU has 42 percent. There is no clear majority because the amount of workers unaffiliated to a union outnumber Solidarity and UASA labor groups, which also favor the agreement.

“This is an opportunity for recruitment of existing AMCU members as the three unions who are willing to sign need one percent plus one to extend the agreement to AMCU,” Franz Stehring, head of mining at UASA, said in an e-mail statement.

Last year, the AMCU lost a court bid to allow its members to strike at individual operations of gold producers where it is the majority union.

AngloGold, Sibanye and Harmony offered to increase guaranteed pay by as much as 32 percent to between 13,728 rand ($988) and 14,611 rand a month for entry-level workers over three years, they said in a joint statement Sept. 15.

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