DRDGold strike brought to early close

[miningmx.com] – DRDGOLD brought a two-day strike at its Ergo plant
to a rapid close agreeing an aggregate 8.84% increase in annual wages, equal to
extra costs per year of about R21m. A previous draft wage agreement was for a
total cost increase in wages of R19m.

“Employees who have been on strike have started to return to work at the start of
the night shift on 9 October,” the company said in an announcement. “It is not
anticipated that the strike will have had any material effect on production,” it said.
About 600 employees at Ergo had downed tools. DRDGold said it would have been
possible to continue operating for a while before losing production.

In terms of the agreement with the National Union of Mineworkers (NUM), entry-
level employees in job categories 4 and 5 will receive a 10% basic wage increase in
year one and 8% in the following year.

NUM had earlier requested that entry level categories be rolled up with higher
categories, a demand that DRDGold CEO, Niel Pretorius said the company could not
countenance. “There’s absolutely no way we can agree to this,” he said.

Employees in job categories 6 and 7 will receive 9% in the first year, and 7.5% in
year two while employees in job categories 8 to 15 will receive 8% in year one and
7.5% in the second year, the company said.

“The higher increases at the lower end could be accommodated within budget
parameters by tapering increases for middle and senior management for the 2014
calendar year,” said Pretorius.

DRDGold produced 146,381 ounces of gold in its last financial year, 8% higher than
in the previous 12 months and revenue grew 18% to R2,076.5m. Its operating profit
was R679.3m, a 9% increase year-on-year. Headline earnings rose 11% to 68
South African cents a share.

DRDGold negotiates its wages outside of the Chamber of Mines of South Africa
which last month concluded wage settlements for its members of up to 8%, equal to
a wage bill of an additional R1.5bn in costs, Reuters reported.