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01 Aug 2011 07:58
Striking coal and gold miners will meet the South African Chamber of Mines in separate talks on Monday in a bid to end stoppages that have cost Africa’s largest economy tens of millions of dollars in lost output.
Coal output has been halted for a week, while about 100 000 gold miners downed tools on Thursday, bringing production to a halt at AngloGold Ashanti, Gold Fields and Harmony Gold at a time when the bullion price is at record highs.
The annual “strike season” is in full swing, with unions demanding 10% to 15% pay rises, well above inflation of 5%. The strikes have so far hit chemical manufacturers, diamond miners and the oil sector.
Negotiators have narrowed the gap on the gold front, raising hopes of more progress on Monday, though neither side is predicting a breakthrough.
The chamber negotiates on behalf of the gold and coal producers.
“They have put something on the table and we are looking at that and consulting with our members and will come back on Monday to see if there can be some improvements in their offer,” general secretary of the National Union of Mineworkers (NUM) Frans Baleni said.
The NUM, by far the largest and most militant of the three unions involved in the talks, had sought a 14% pay rise and the gold mine companies had offered rises of 7% to 9%.
Impacts of the strikes
The strikes highlight the difficult position of the ruling African National Congress, which is keen to draw foreign investment but is in a governing alliance with organised labour.
Investors hammered South African mining shares for most of last week on concern about the impact of lost production—despite record high gold prices—and global fund trackers said redemptions from African regional funds had hit a 23-week high.
Coal producers impacted by the strike include Anglo Thermal Coal SA, Exxaro, Optimum Coal and Xstrata Coal.
Markets on Monday will also be watching a fresh round of wage talks between unions and Impala Platinum, the world’s second largest producer of the precious metal.
Impala and its larger rival Anglo American Platinum,—which is also engaged in negotiations—together account for around two-thirds of global platinum output, so strikes against them will almost certainly support its price.
Gold’s rise to record prices has been led mainly by its safe haven status at a time of debt crises in America and Europe but analysts have said the South African strikes could also help prop up its price if they are prolonged.—Reuters
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