AMCU suspends strike as Sibanye calls in all unions for talks

Joseph Mathunjwa, president, AMCU

THE Association of Mineworkers & Construction Union (AMCU) suspended a strike at the operations of Sibanye Gold at the eleventh hour after entering into discussions with the gold company.

Sibanye Gold said in a statement to the Johannesburg Stock Exchange that AMCU “had agreed to suspend any industrial action at Sibanye’s operations while engagement continues with AMCU and other representative unions”.

The statement suggests that Sibanye may revisit the terms of its October wage agreement signed with the National Union of Mineworkers, UASA and Solidarity in which the sides shook hands over increases of up to 12.5%.

“As previously stated, management at Sibanye is committed to ensuring that the interests of all stakeholders are considered
and protected, and that the viability and sustainability of our business is maintained,” said Neal Froneman, CEO of Sibanye Gold in a statement.

“We will continue to engage constructively with AMCU leadership in an attempt to ensure a favourable outcome for all stakeholders”, he said.

Whilst calling AMCU into talks might suggest Sibanye fears the effects of the strike, it’s also worth remembering that the rand gold price has increased about 20% since the wage deal was signed.

Deustche Bank said in a report on March 22 that at then spot gold prices, Sibanye’s gold business was worth R8bn more even though it was trading at a premium.

Sibanye could argue, therefore, that adjusting the terms of the original wage deal is ethical although it may spur AMCU into calling for similar adjustments at the mines of other companies that signed the deal.

James Wellsted, head of corporate affairs at Sibanye, said it was too early to comment on the engagement. Sibanye said it would issue more details when available. AMCU did not issue a press statement about the matter.

7 COMMENTS

  1. I think there should be a one off annual top up but not a % increase. What happens if prices drop and profits disappear, I can’t see AMCU and others agreeing to reverse increases. Let workers ride it out in good times and bad on annual top up’s, not permanent increases. Heads they win, tails the company looses!!

    • That’s rational. I bet Neal also has an eye on platinum mine labour relations at the same time as this. If he can establish some good blood then it may stand his company in good stead for the mid-year platinum wage talks – although I’m unsure if that responsibility still falls to Amplats …? I imagine it does on second thoughts. The question is whether unions will seize on this as an opportunity to score points. A strike vs. disruption as all unions go into a feeding frenzy might end up being the same outcome for Sibanye. But we’re surmising. I actually don’t know the detail of these discussions … yet.

  2. It is promising to see the parties back at the negotiating table to find each other and hopefully a favorable outcome will emerge. We can only hope that PikitUp Management and the Unions can learn a thing or two from Sibanye & AMCU.

  3. Yes the rand gold price has appreciated but due to rand weakness the costs are increasing at a rapid pace. The unions need to understand that the profit share is not a dirty capitalist word. It is a fair way to reward workers when the mines are doing well and the mines don’t sink in difficult times. Why can’t we have a win / win situation.

    • I don’t actually know the minutiae of these discussions yet but I seriously doubt any union is going to agree to some downside protection for a gold company; especially if they won’t, or struggle, to accept productivity-linked wage deals. Having said that – and notwithstanding the costs increase argument – SA gold firms are in a much better place today than in early December. Neal has made a big deal of establishing a caring attitude towards employees so I think cutting them in to a higher rand gold price is probably consistent with that …. if that’s the deal. I am surmising a bit in this article based on the statement on Sens and a chat with the firm in question. – David

  4. Good move by Neal. Sibanye can afford higher wages and ensuring everyone gets the same means NUM can survive. In effect he is shifting the labour problem – at some point there has to be a prolonged struggle with the mines winning to ensure the long term viability of the industry – to other companies.
    The company most affected could be Lonmin as no strike means more appetite for a strike at the next opportunity.
    My personal bet ist that with the gearing Sibanye has the company could be very vulnerable but only if gold prices go down or the Rand appreciates and that either Sibanye or Lonmin will not survive the next 4 years. Lonmin will be out of cash again in early 2018.

  5. Always think carefully before you take a stand so that you don’t have to back-track significantly when you come under pressure. Also, always negotiate in good faith and take all the stakeholders seriously. Be careful not adopt an unsustainable hard or soft line. Your powers are apparent rather than real because they can be exercised only to the extent that other stakeholders are prepared to yield. Don’t wait for wage negotiations time to engage all the stakeholders on business imperatives. During continuos engagement to improve the business, always respectfully consider each stakeholeder’s view.

Comments are closed.