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Union wants 15% wage hike from SA gold firms
Ines Schumacher
Posted: Mon, 20 Apr 2009

[miningmx.com] -- SOUTH AFRICA'S National Union of Mineworkers (NUM) is demanding a 15% wage increase for its members, firing the first salvo ahead of the start of two-year wage talks for the country's gold and coal sectors.

"The NUM believes it is something the Chamber can afford with ease given the huge infrastructure development in the country which led to huge demand for coal as well as the gold price and the commodity being a safe haven for investors," NUM said in a statement released on Monday.

NUM spokesperson Lesiba Seshoka told Miningmx that the union will remain firm on its demands. "Our members are very angry. The Chamber of Mines has been saying that they have been conducting intelligence work on our members and that a strike will be impossible. Our members have told us in no uncertain terms that this year they mean business. The Chamber must deliver on the 15%, otherwise our members will hit the ground running," he said.

The talks to settle a fresh two-year wage agreement come against the backdrop of global economic turmoil and widescale job cuts in the South African mining industry, something the country's largest mineworkers' body has said it will take into account.

NUM submitted its demands to the Chamber of Mines on Monday morning ahead of the formal start of wage talks in May.

Further demands include that medical aid be given to employees on a 70:30 basis (employer:employee), the minimum basic rate for entry level underground workers be put at R5,000/month, the minimum living out allowance be R1,500 per month and that the home owners' allowance should be adjusted to R5,000 per month or 25% of the monthly repayment of the mortgage.

“The mandate is clear and our members say they expect no excuses from this industry," NUM general secretary Frans Baleni said.

The gold industry had a tough 2008 and largely missed out on the benefits from a record high gold price of above $1,030 in March as it grappled with the effects of a week-long shut down in January due to power shortages, and government demands for it to curtail energy usage by 10%. High input costs also ate heavily into margins.

The rand gold price has touched record highs of above R300,000/kg a number of times so far this year and the expectations are for the gold companies to post strong financial results in the March quarter.

Average consumer price index (CPI) for 2008 was 11.5% and was set at 8.6% for February 2009 year-on-year. South Africa's Reserve Bank Monetary Policy Committee estimates the average CPI for 2009 to be slightly over 6%.

"The Reserve Bank cannot guarantee that in the next 2 years for which this agreement would apply the inflation would remain the same. For many years we have agreed for the employers to give us inflation plus one which is very problematic because it doesn’t give any real benefit to our members," Seshoka said.

He said that any gold mining houses affected by retrenchments and citing other problems has nothing to do with the downturn and everything to do with poor management. "It is not our intention to take into consideration poor management styles,” he said.

Peter Major from Cadiz Corporate Solutions said the demands by NUM are not as high as previous years. "I cannot believe that workers will get a double-digit wage increase. But unions always start out with crazy demands and then the two sides end up in the middle somewhere," he said.

A spokesperson for the Chamber of Mines told Miningmx that the chamber received the demands and would confer with its stakeholders before it could comment.

The Chamber of Mines represents the major gold producers, Harmony Gold, Gold Fields and AngloGold Ashanti. It also represents the major players in the coal industry such as Exxaro Resources, Xstrata Coal, Kumba Resources, BHP Billiton Energy Coal and Anglo Coal.

Trade union Solidarity will hold a workshop on Tuesday where it will finalise its demands. Head of collective bargaining Gideon du Plessis told Miningmx Solidarity will submit its demands before the close of business on Tuesday. Wage negotiations begin in the second week of May.