Strike threat for SA gold sector

Reuters | Thu, 11 Jun 2009 20:21
[miningmx.com] -- South African mineworkers' unions said on Thursday they were deadlocked with gold producers over wage demands and would strike should an arbitration authority fail to reconcile the parties.

The 300,000-strong National Union of Mineworkers (NUM) and the smaller Solidarity union rejected an improved offer of 7 percent from gold producers, and called in a mediator, the Commission for Conciliation, Mediation and Arbitration (CCMA).

Mine workers have demanded a 15 percent pay rise, well above South Africa's consumer inflation of 8.4 percent.

A new wage deal is due to take effect on July 1.

The unions say their wage demands can be met because the price of gold has risen despite the global economic downturn.

But South African gold producers, who negotiate as one under the Chamber of Mines, say the unions' wage demands plus their request for additions to other allowances represent a total demand of 28 percent, and would dramatically raise production costs, jeopardising the long-term survival of their industry.

"It has always been our intention to bargain in good faith, to try reach a settlement through negotiations..., but this year looks like we will have to use a different tool in strike action," Frans Baleni, the NUM general secretary said.

"Strike action is and has always been the last resort. It is unavoidable this year."

Elize Strydom, who negotiates on behalf of gold mining companies, welcomed the arbitration authority's involvement.

"We are committed to finding solutions and a real balance between the needs of the employees and the companies," she said.

A strike in the lucrative gold sector would see more than 150,000 gold miners downing tools, disrupting output in the world's third biggest gold producer after China and the U.S.

It would likely affect AngloGold Ashanti, Gold Fields and Harmony, the world's third, fourth and fifth biggest producers respectively.

In 2007, a strike was averted at the last minute when the CCMA helped the parties reach an agreement on wages, but in 2005 it was unable to bridge the divide. More than 100,000 workers stayed away from mines for days in what was the biggest such strike in close to two decades.

Harmony said it would explore a further wage offer on a bilateral basis, but said it was not breaking ranks.

"It is not unusual for a company to negotiate some aspects of the unions demands on its own. We are not breaking ranks," Graham Briggs, Harmony's chief executive officer told Reuters.

"We would like to have individual discussions on some issues, we are investigating other options," he said but declined to give further details citing confidentiality.

Solidarity said in January that senior managers of AngloGold, Gold Fields and Harmony received increases of between 10 to 15 percent and that mineworkers required similar raises.

"Professional help is now needed in the negotiation process," Solidarity's spokesman Jaco Kleynhans said.