/ 19 May 2013

Time to dig deep, NUM warns mining houses

South Africa is a country made for drama and controversy.
South Africa is a country made for drama and controversy.

NUM said it was seeking an entry-level minimum monthly wage of R7 000 for surface workers and R8 000 for those underground in a submission to the country's Chamber of Mines, a copy of which was seen by Reuters.

Elize Strydom, the industrial relations adviser at the Chamber of Mines, said the minimum wage for surface workers is currently R4 700 and for underground miners it is R5 000, so the demands for the latter are 60%.

NUM also said it wanted 15% hikes for "all other wage categories", which would refer to more experienced and skilled workers.

Impala Platinum meanwhile said on Friday that the country's mining industry could ill afford wage rises during talks that were about to start with a new and unpredictable union, so it may well face fresh strikes.

South African mining companies are due to embark on one of their toughest periods of wage talks in the next one or two weeks, with increasingly radicalised unions.

The world's biggest platinum producing country is hoping to avoid the 2012 wildcat strike action that cost billions in lost revenue and production.

Mining companies are hurting from a nearly 20% drop in platinum prices in the last two years, as the supply disruptions failed to offset weakness in demand for the metal used chiefly in motor vehicle catalysts.

'Difficult to afford'

Workers are hoping the unions can deliver deals like the 11-to-22% pay rise Lonmin gave illegal strikers after 34 were shot dead by police at its Marikana mine.

"I don't think we have a mandate yet for wage levels, I just know from the mines' point of view that any kind of increase is going to be difficult to afford," Derek Engelbrecht, Impala's group executive marketing, told Reuters in an interview on Friday.

"I think there certainly is potential for further industrial action in the form of strikes," he added.

Over the past year the Association of Mineworkers and Construction Union (Amcu) has poached tens of thousands of members from the once dominant NUM, which has been hurt by a view that its leaders had become too close to management.

Amcu leader Joseph Mathunjwa on Friday threatened to bring Africa's biggest economy to a standstill and the rand extended its slide after tumbling to a four-year low against the dollar on Thursday on fears of a strike at Anglo American Platinum.

More than 50 people have been killed in more than 12 months of unrest stemming from a turf war between the two unions.

"We are now going into uncharted territory," Engelbrecht said. "We are going to negotiate with a new union that we have never dealt with before on wages, so trying to predict the outcome would be foolhardy."

The negotiations will start against a backdrop of jobs cuts and approaching elections.

Impala is looking at plans to cut capital and operational expenses, including staffing numbers, Engelbracht said.

"The whole thing has been reviewed to try and reduce both absolute and unit costs and improve productivity," he said.

The world's largest platinum miner Amplats plans to cut 6 000 jobs and mothball two unprofitable mines near the platinum belt city of Rustenburg. – Reuters