[miningmx.com] – SOUTH Africa’s Chamber of Mines has called for a “measured and strategic conversation” with key unions ahead of three-day gold industry wage negotiations scheduled to kick off on June 22.
“The industry is at a crossroad,” said Elize Strydom, chief negotiator at the chamber. “We need a measured and strategic conversation between partners with the aim of jointly considering ways to achieve a sustainable industry,” she added.
The National Union of Mineworkers (NUM) is to push for an 84% rise in basic pay for entry-level gold mining workers whilst its fierce rival, the Association of Mineworkers & Construction Union (AMCU) has asked for a R12,500 per month basic wage.
Said Strydom: “This clearly requires a different approach to negotiations – an approach that provides for in-depth, focused engagements and joint solution-seeking discussions”.
“The gold companies will be tabling a proposal on an Economic and Social Sustainability compact for the long-term benefit of all the stakeholders,’ she said.
As a result, gold producers’ proposed negotiations take place at a neutral venue that provided for large plenary and focused meetings and an independent chairperson – a demand that had been previously requested by Joseph Mathunjwa, president of AMCU.
These proposals were accepted by all four unions, said the chamber. Further dates and details regarding the venue and chairperson/s “will be advised in due course,” it said.
Wage talks this year come against a backdrop of heavy cost-cutting among the major gold producers, especially Harmony Gold which has announced plans to restructure its Doornkop mine, having already started the restructuring of Kusasalethu.
Goldman Sachs said in a report last month that the protracted strike in the platinum sector last year was unlikely to repeated in the gold industry.
“We see a limited likelihood of a similar disruption in the gold sector and estimate that a double-digit increase in wages could force restructuring and even mine closures,” said Goldman Sachs.
Graham Briggs, CEO of Harmony, said in early May that massive retrenchments would be inevitable in the event high wage increases were granted. “I think that all employees should be concerned about their jobs and should start looking after their jobs,” he said.
“Companies can give higher pay increases but will then go bankrupt. It seems to me to be stupid to grant the higher increases and then close the operation,’ he said.
Commenting around the same time, Srinivasan Venkatakrishnan, CEO of AngloGold Ashanti said: “What we cannot have is year-on-year discussions around wages without any economic consequences.
“That dialogue has to change. There is a trade-off between wage increases and employment numbers and we want to bring that into the dialogue up-front”.
“In the past, increases were given and restructuring became a topic that followed on as a result of those increases. This time around we want to have the discussion at the same time rather than a follow-up discussion,’ he said.
The talks this year will also feature David Sipunzi, the newly elected secretary-general of the NUM who has wasted no time expressing his disappointment with the approach of the gold sector to talks.
“I am concerned by the CEOs (of mining firms) pleading poverty even before the talks started, yet this does not show in their lifestyles,” he said.
