Exxaro agrees 7.5%-10% wage deal to end Grootegeluk strike

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EXXARO Resources brought a nine day strike over wages at its flagship mine, Grootegeluk and Leeuwpan to an end today after agreeing a new three-year wage agreement with the National Union of Mineworkers (NUM).

Employees at Leeuwpan are expected to return to work today (September 22) whilst production at Grootegeluk will restart on September 25, the company said. It did not disclose the terms of the agreement.

However, the NUM said in a separate announcement that it had extracted wage increases of 10%, 8.5% and 7.5% for 2017 and 7.5% for both 2018 and 2019. In addition, the housing allowance was increased to R3,978 for 2017, R4,489 for 2018 and R5,000 for 2019 whilst a 7.5% increase for three years had been agreed on standby allowance, including other allowances and benefits. The parties also agreed on a family responsibility leave of 8 days.

Meanwhile wage talks are continuing with another union, Solidarity, the members of which did not go on strike. The NUM called the strike on September 13 after having set down a 10% wage demand. It had been locked in negotiations through the Council for Conciliation, Mediation and Arbitration (CCMA) since September 6.

“We are pleased that the parties were able to resolve the dispute speedily,” said Mzila Mthenjane, head of strategy for Exxaro Resources. “We are working closely with all stakeholders to ensure that the affected mines resume operations safely,” he added.

Grootegeluk, which is situated in the Limpopo province, produced 11.4 million tonnes (Mt) in the first six months of Exxaro’s financial year – about half of the total 20.9Mt it produced in thermal coal, including buy-ins. Of Grootegeluk’s production, some 10.3Mt was supplied to Eskom. Nearly all of Leeuwpan’s 1.8Mt in thermal coal production in the first half of the year was sold to Eskom.

Grootegeluk and Leeuwpan negotiate wage increases directly with the NUM, but its other mines – housed in the companies Delmas Coal and Exxaro Coal Mpumalanga – are part of the Chamber of Mines’ central bargaining council which is also negotiating wage agreement renewals on behalf of Anglo Coal, Kangra Coal, Koornfontein Mines and Glencore.

South32, the Perth- and Johannesburg-listed diversified miner, conducts its wage negotiations independently of the Chamber of Mines. Mike Fraser, COO of South32’s southern Africa operations, said the firm was “at the nutty end of talks”.

“With coal, we started with a demand list of 40 items and we’re now down to eight items,” he said. “The latest is that the unions are looking at about a 10% wage increase; that’s where it is at the moment.

“But we know it will get more into the single digits and closer to our numbers, and literally what we can afford is more like we settled at manganese (assets in South Africa which was about 7%). It’s probably where we’d like to end up,” said Fraser.

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