Johannesburg, South Africa — MININGREVIEW.COM — 26 March 2009 – South Africa’s unions are planning to demand big wage hikes from gold producers enjoying high prices, but gold companies have set the stage for tough talks saying they are missing out on the soaring prices due to falling output.
Reuters reports that the National Union of Mineworkers (NUM) – which represents most of the 150 000 workers in the country’s gold sector – wants to shield its members’ earnings from inflation and still ensure they keep their jobs, despite the global economic turmoil.
“South Africa’s consumer inflation stands at 8.6% year-on-year in February, from 8.1% in January, amid signs that the financial crisis is pushing Africa’s biggest economy towards its first recession in 17 years,” the agency added.
The talks between the unions and the mining companies are due weeks after national elections on 22 April.
“Inflation will be our guide. We will demand much more than inflation,” said NUM spokesman Lesiba Seshoka. “With that in mind, we will push very hard for wage increases. If we don’t get our way there will be blood on the negotiation table. Strike action is always an option,” he warned.
In 2005, about 100 000 mineworkers, mostly members of the NUM, went on strike for days in the country’s largest gold mining strike in 18 years to demand higher wage increases, costing South African gold producers about US$20 million (R200 million) a day. They resumed mining only after receiving an increased offer.
Mineworkers in the country’s gold sector earn a minimum wage of R3 300 rand a month before any output-related bonuses. Workers who don’t live in hostels on mine company premises are also paid an allowance of some R1 100.
The gold companies also say the sector missed out on reaping the benefits from a record high gold price of above US$1 030 last March due to a five-day shutdown caused by a power shortage.
“I’m under no illusions, they will be tough negotiations,” said Elize Strydom, chief negotiator for the South African Chamber of Mines, which represents the country’s main gold producers.
“As a sector, we are not producing enough gold to take advantage of the rising gold price,” added Strydom , who will negotiate on behalf of the big gold producers
Strydom will negotiate on behalf of big gold producers, including AngloGold Ashanti and Gold Fields – the world’s number three and four producers, respectively.