All eyes on the gold sector labour talks

South African gold producers and unions opened wage talks on Thursday, with labour groups set to table the largest-ever pay demands weeks after the precious metal’s steepest quarterly price slump on record.

Charmane Russell, a spokesperson for the Chamber of Mines, which represents the producers, said completing a protocol on how the process is conducted is the first item on the talks agenda. Unions are then due to explain their positions on pay and answer questions from employers, she said.

The National Union of Mineworkers (NUM), which represents more gold miners than any other, is asking for increases of as much as 60%.

Double pay
The Association of Mineworkers and Construction Union (Amcu) is seeking to double the basic pay for underground workers. The wage requests are unprecedented, said Russell, and follow a 23% drop in gold prices in the first quarter.

“I’m confident that we’ll be able to reach a settlement that is acceptable to all parties,” Shabangu told reporters on Wednesday. “As a former trade unionist, it doesn’t mean that when you start with 60% you will end up with 60%. It never happens.”


AngloGold Ashanti, the world’s third-biggest producer, Gold Fields, Harmony Gold Mining and Sibanye Gold are among companies that belong to the chamber. Union rivalry has fuelled wage demands, Eugene King, an analyst at Goldman Sachs, wrote in a July 5 note to clients.

Acid Test
?
“Worsening economics have put extra pressure on the miners to achieve a better outcome for their shareholders, but for Amcu and NUM, this will be an acid test and hence both are demanding double-digit pay rises,” said King.

Amcu, representing about 17% of workers, is the biggest in the nation’s gold industry after the NUM, which speaks on behalf of 64% of gold miners, according to the chamber. The United Association of South Africa and Solidarity unions, representing workers in higher-skilled categories, have proposed wage increases of 18% and 14%, respectively. – Bloomberg

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Paul Burkhardt
Paul Burkhardt works from Johannesburg. Bloomberg reporter covering oil/gas, renewables, mining and unions in South Africa and sub-Saharan region. Retweets not endorsements. Paul Burkhardt has over 1431 followers on Twitter.

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