Unions, gold sector declare wage dispute

The official wage dispute could bring more trouble for beleaguered bullion producers.

Rising worker militancy has coincided with soaring costs and falling prices that have prompted producers such as AngloGold Ashanti to shed a total of 14 000 jobs over the past two years.

Wednesday's declaration by the unions means that two-week-old salary talks, labelled as the toughest since the end of apartheid in 1994, will now be held up by a 30-day process of mediation that could end in an industry-wide strike.

"As far as we are concerned, negotiations have not yet begun," said Frans Baleni, general secretary of the National Union of Mineworkers (NUM), one of four unions at the bargaining table.

If wage bills rise dramatically, the gold companies could be forced to make further job cuts – prospect that is causing concern in the ruling ANC as it prepares for an election in the first half of 2014.

Bullion producers are offering a wage increase of 5%, up from their initial offer of 4% but way off the 60 to 100% demanded by workers.

Legal strike
?South Africa's labour laws allow for wage disputes to be referred to an outside mediator.

If that fails, employees are allowed to go on a legal strike.

The NUM, Solidarity and Uasa, which will collectively approach a mediator, represent 73.6% of the 120 000 mineworkers employed by gold producers in pay negotiations.

Solidarity, which represents skilled workers, said that the gulf between the two sides was a sign of the "exceptionally challenging" weeks that lie ahead.

Over the past year South African mining companies have been shaken by wildcat strikes and violent unrest stemming from a turf war between the National Union of Mineworkers and rival union Amcu.

The violence has left more than 50 people dead, cost billions of rand in lost output and sparked a downgrade of South Africa's credit rating.

Industry body the Chamber of Mines said that the gold producers' offer for 2013 "will be a realistic one, in line with official inflation figures".

South Africa's June inflation slowed to 5.5% in June.

A one-day strike in the gold industry costs producers R349-million in lost revenue and mineworkers R100-million in lost wages because of the sector's no-work, no-pay rule. – AFP

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