Beatrix shaft at
Sibanye Gold “’
one of the companies
preparing for an
imminent strike
Johannesburg, South Africa — 29 August 2013 – South African gold producers are preparing for bruising strikes that could start as early as this Sunday, with some companies planning for stoppages of up to three months in a high-stakes fight between capital and labour.

The National Union of Mineworkers (NUM) will give gold producers 48 hours’ notice of its members’ intention to strike over deadlocked wage talks tomorrow, according to a source with direct knowledge of the matter, reports Fin24, citing Reuters.

“The decision to issue a strike notice on Friday has now been taken,” the source said. Workers could then begin stoppages from the Sunday night or Monday morning shifts in the country’s gold mines.

Wage talks are deadlocked with other unions as well, including NUM’s more hardline rival the Association of Mineworkers and Construction Union (AMCU), which wants wage hikes of up to 150% for the lowest-paid miners.

“We’re not ruling out a strike but we need to consult with members first,” AMCU general secretary Jeffrey Mphahlele said.

A complete shutdown of the gold sector could cost South Africa more than US$35 million a day in lost output, according to calculations based on the spot price.

This will pile pressure on a struggling economy already weighed down by a slew of ongoing strikes in auto manufacturing, construction and aviation services, and facing threatened stoppages by textile workers and petrol station employees.

On Saturday, the NUM gave bullion producers, including AngloGold Ashanti, Gold Fields, Sibanye Gold and Harmony Gold, a seven-day ultimatum to meet its demand for pay rises of up to 60% or face strike action.

The Chamber of Mines, which negotiates on behalf of gold producers, said on Tuesday that it had made a final offer to unions to increase basic wages by between 6 and 6.5%.

NUM, which represents 64% of the country’s gold miners, dismissed this offer. Another more militant mining union is seeking pay hikes as high as 150%.

The companies say these demands are unrealistic as they are being badly squeezed by rising costs and falling bullion prices.

South Africa’s declining gold industry was caught off guard last year when violent wildcat strikes spread from platinum to gold shafts, costing R5 billion in lost output. The strife in the mines, rooted in a union turf war, dented economic growth and led to sovereign credit downgrades.

This time round, the companies plan to be better prepared.

“We have planned for a three-month strike … and we are prepared for that level of disruption," said James Wellsted, spokesman for Sibanye Gold.

Experts say producers can shut down costly power-intensive functions such as underground ventilation, and can mine high-grade deposits with skeleton staff and maintain some surface activity.

The gold companies are also increasing security, preparing for the possibility of violence after more than 50 people were killed last year in clashes in the mines, including 34 striking miners shot dead by police at the Marikana platinum mine.

The labour mayhem raised questions about the ability of President Jacob Zuma’s ANC government to manage social tensions fuelled by poverty, inequality and unemployment affecting millions of South Africans 19 years after the end of apartheid.

Source: Fin24. For more information, click here.