[miningmx.com] — TENS of thousands of gold miners will stop work on Thursday, adding to a wave of strikes and potentially costing the gold mining sector $25m a day in lost output as bullion trades near all-time highs.
The country’s “strike season” is in full swing with unions demanding 10% to 15% pay rises. Inflation is 5%.
Unions representing coal workers were set to meet the Chamber of Mines in a last attempt to end their wage strike.
Some 100,000 workers at AngloGold Ashanti, Gold Fields, Harmony Gold and another smaller mining group were due to go on strike after shifts end at 18:00.
National Union of Mineworkers (Num) spokesperson Lesiba Seshoka said some workers could walk out earlier because the union’s 48-hour strike notice to mining groups expires at 12:00.
“There will be a total shutdown of the entire gold mining industry for it is inconceivable how the industry could want to give workers an increment of 7% when the gold price is at a record high,” said a statement from the Num, which wants 14% from the gold producers.
Africa’s largest economy was partly built on its vast gold reserves but dwindling grades, deeper mines and investor jitters have pushed it from first to fourth in global production.
The strike is unlikely to affect the spot price which hit an all-time high of $1,628 an ounce on Wednesday on US and European debt woes. Analysts say a prolonged strike may push the price of bullion even higher.
In other sectors, an almost three-week strike in the petroleum sector that sparked panic buying at the pumps looked like it might end, while the possibility of strike action loomed over the platinum industry.
Union leaders are to meet petroleum industry officials on Thursday to say whether a revised offer had been accepted, said Nerine Kahn, director of the Commission for Conciliation, Mediation and Arbitration, South Africa’s labour mediator.
INFLATION WARNING
If most settlements come in near double digits, economists have said that inflation could accelerate and interest rates could start climbing faster than expected from their lowest levels in three decades.
The ruling African National Congress therefore has a delicate political balancing act as it tries to entice investment while maintaining an alliance with organised labour that delivers much of its voting base.
Markets will also be watching the outcome of talks between the unions and Anglo American Platinum, the world’s No. 1 producer of platinum group metals which accounts for about 40% of global production.
The two sides remain poles apart with the NUM demanding 20% and Amplats’ last public offer at 4.6%.
Companies say they can ill afford steep increases, even with commodity prices sky high, because of other rising costs such as fuel, power and explosives.
But the official inflation rate does not tell the whole story for many miners, who are lower or mid-income workers with many dependants and spend much of their take-home pay on food and fuel, which are becoming costlier.
Some economists say that rising labour costs are eroding South Africa’s status as an investment destination since its workforce is already more expensive and less productive than those found in many of its emerging market rivals.
Workers are also striking at diamond miner De Beers.
