Amcu weighs centralised gold wage talks

[miningmx.com] – THE Associated Mineworkers & Construction Union (Amcu) is considering joining the National Union of Mineworkers (NUM), and other unions in this year’s round of centralised gold industry wage bargaining.

“We will submit wage demands next week and then announce a decision on whether to join the central bargaining system,” said Joseph Mathunjwa, president of Amcu.

Elize Strydom, chief negotiator for the Chamber of Mines of SA, said her team had met with Amcu representatives and briefed the union on the process ahead of a central wage bargaining forum which would be with the chamber.

“We have met with Amcu. It asked detailed questions on how the process works. There is a probability of Amcu joining the centralised wage bargaining unit, but it will want to get a mandate from its members first,” Strydom said.

Having Amcu join with other unions in a single process would represent significant progress for the gold industry, and may even pave the way for Amcu to hold centralised wage negotiations for members in the platinum industry next year.

Strydom said the union had been invited to join the talks. “Not to invite Amcu to bargain centrally would involve a very convoluted argument,” Strydom said, adding that Amcu had 17% representation in the gold industry, behind NUM (65%) but ahead of the smaller unions such as Solidarity and UASA which join the central bargaining process.

One concern, however, is that if Amcu joins other unions and the Chamber of Mines in wage talks that it abandon mine level talks for similar level employees. “That would be a dangerous situation,” said Strydom.

The NUM said earlier this week that it would ask for up to 60% in wage increases for certain entry-level employees and 15% for other ranks. According to estimates, the blended wage demand is for an increase in the ‘high teens’.

Even this, however, would be difficult for the South African gold industry to support and imperiled an important part of the economy, said Roger Baxter, senior economist and head of the strategy unit at the Chamber of Mines.

About 40% of the South African gold industry was loss-making in 2012 even at a gold price (in rands) of R500,000 per kilogram, he said.

Increasing labour costs – which comprised 52% of cash production costs and 41.8% of total operations before capital expenditure – would encourage a further shrinkage in the country’s gold sector.

“Gold output sank 17.2% year-on-year in 2012 – equal to about 167 tonnes – which is the lowest level of gold output from South Africa since 1905,” Baxter said.

At R72bn in export earnings, the gold industry represents 19.8% of South Africa’s merchanised exports.