[miningmx.com] – SOUTH Africa’s gold producers tabled their “final offer” to unions today in which increased cash and a pledge to pay R12,500 a month for entry level workers in 2018 – the third year of the deal – were the key concessions.
Other changes to the 7.8% to 13% a year offer of June 29 included shortening the length of the deal to three from five years, while AngloGold Ashanti and Sibanye Gold dropped the profit share component of their earlier offers. Harmony kept is gain share offer saying it would pay 5% of any profit on a quarterly basis.
The offer took the gold industry to “the limit” of what it could bear,” said Elize Strydom, chief negotiator for the Chamber of Mines which is representing Harmony Gold, Sibanye, AngloGold and Evander Gold Mines (owned by Pan African Resources).
Village Main Reef settled it own wage deal with the National Union of Mineworkers (NUM) on July 28 in which it had an across-the-board increase of R1,000 for all underground employees and R800 for surface employees accepted by the union.
“We believe this is a generous offer which is above inflation and at the limit of what this industry can bear whilst remaining sustainable,” said Strydom of the improved offer by Harmony, AngloGold and Sibanye.
“It is our final offer, and we hope our employees will accept it so we can move forward together to confront the challenges the industry faces,” she said.
Were unions the Association of Mineworkers & Construction Union (AMCU), NUM, UASA and Solidarity to reject the offer, the wage talks would go into dispute. Thereafter, a strike could be called.
The offer responds to union demands for an increase in the monthly disposable cash paid to entry level workers. Harmony lifted its monthly increase to R500 from R450 whilst AngloGold and Sibanye Gold raised the increase to R1,000 a month from R750 and R625 respectively.
“Through this final offer, each of the companies has ensured that the guaranteed pay of entry level employees will reach R12,800 and R13,200 per month in the third year of the agreement,” the chamber said in a statement. In this regard, the offer is similar to the platinum industry settlement a year ago.
Guaranteed pay includes basic pay and allowances, as well as medical retirement contributions, the chamber said.
The other significant development is that the offer has been made on the basis that it be accepted by all unions which means that AMCU would not be forced to follow NUM’s lead as majority union were the latter to reach agreement.
Strydom said on July 21 that the $100 per ounce decline in the gold price and multi-year lows for South African gold equities made it yet more urgent for the industry to agree new wage deals.
Analysts believe the South African gold sector is moving towards a strike. On the day after AMCU declared a dispute with the chamber over its membership numbers, Macquarie Research said: “With AMCU making its intentions clear, a sector-wide strike in gold seems unavoidable, albeit for only a portion of the workforce at each company”.
