Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Striking South African miners. (Image from archives)
Wage talks between South African bullion producers and unions started will reach a decisive stage next Monday, as major gold miners announced they intend to table a wage offer to labour groups after presenting their proposed economic and social sustainability pact during the opening stage of negotiations.
In a joint statement on Wednesday, five gold companies including AngloGold Ashanti (NYSE:AU), (JSE:ANG), Harmony Gold (NYSE:HMY), (JSE:HAR) and Sibanye Gold (NYSE:SBGL), (JSE:SGL) said they have drafted an “economic and social sustainability compact” document, or a welfare package, which aims to reduce positional bargaining and allow for agreement on the impact of any settlement.
South Africa’s gold companies, which bargain collectively under the country’s Chamber of Mines, are already battling low metal prices and mounting electricity costs amid power outages. But unions that represent more than 80% of the country’s gold workers are demanding as much as double current wages.
It is estimated that the sector employs about 94,000 workers.
According to the chamber, costs for gold miners between 2008 and 2014 jumped on average more 20% annually. Production over the past decade, instead, has steadily fell by roughly 8% per year.
