A convertor furnace
at Impala Platinum’s
Mineral Processes
 
Johannesburg, South Africa — MININGREVIEW.COM — 10 June 2009 – South Africa’s biggest mineworkers union – the National Union of Mineworkers (NUM) – is demanding a wage increase of 20% – more than twice the inflation rate – for its members at Impala Platinum (Implats), the world’s second biggest producer of the precious metal.

South Africa’s inflation rate stands at 8.4%, and the wage demand could set the stage for tough negotiations in a sector that has been badly hit by the global economic crisis. Implats said in a statement here that it could not comment on the wage demand because wage negotiations had not started yet.

Reuters reports that the wage talks with Impala – which employs over 30 000 people in South Africa – are due to begin on 17 June, and a new wage deal is due to take effect on July 1.

Revealing its demand here, NUM said in a statement that it also wanted the new wage agreement with Implats to cover one year instead of the usual two years.

Wage talks in South Africa’s mining sector are closely watched because if they fail and workers go on strike any disruption in output could impact metals prices.

“The NUM demands a wage increment of 20% from Implats, and that entry level wages be elevated to R 5 000 a month for underground workers,” said union spokesman, Lesiba Seshoka. Underground workers currently earn R3 300 a month.

The union also wants Implats to increase its pension fund contribution to 25% from the current 16.5%, and to put a moratorium on the employment and promotion of white women until there is a balance in terms of racial demographics. Other union demands include a higher transport allowance, longer maternity leave and fewer working days.

The mining sector has pointed out that the union’s wage demands are well above inflation, and mining companies say paying out such increases could dramatically raise production costs and jeopardise the long-term survival of the industry.

The country’s gold producers are already engaged in wage negotiations with the NUM, and have offered a 6 % wage increase, but the union has threatened that it may go on strike if its demand of a 15% wage hike is not met.

The price of platinum has tumbled due to the credit squeeze leading to big cutbacks on planned capital expenditure and growth projects in the sector, including at Implats.