South Africa’s gold workers ‘unimpressed’ with 13% pay rise offer

Striking South African miners. (Image from archives)

South African gold companies tabled Monday a five-year wage increase offer of as much as 13% to the industry’s unions, which said the proposed pay rise falls “way too short” of their demands.

Unions representing 93,000 gold miners want between 100% and 80% salary hike from employers including AngloGold Ashanti (NYSE:AU), (JSE:ANG), Harmony Gold (NYSE:HMY), (JSE:HAR) and Sibanye Gold (NYSE:SBGL), (JSE:SGL).

AngloGold Ashanti offered to raise entry-level workers’ pay by 13% starting July 1, while Sibanye Gold Ltd. and Harmony Gold Mining Co. proposed 11% and 7.8% respectively These offers, noted the miners in a joint statement, are significantly above-inflation rates, which hit 4.6% in May.

Wages make up 55% of gold mining costs in South Africa.

The majority union, the National Union of Mineworkers (NUM) hinted last week that it could work with an offer of 20%, but today’s proposals did not satisfy its leaders.

“As far as the increase in wages is concerned, they are very far from what we are demanding,” NUM General Secretary David Sipunzi told Bloomberg. “The indication is that we might not even meet halfway with the employers and therefore they are pushing us towards a strike.”

Prepared to strike

South Africa’s largest union, the Association of Mineworkers and Construction Union (AMCU), added it wouldn’t accept any offer that its members disagree with, warning they are prepared to strike.

Gold producers in the country are already battling low prices for the coveted, yellow metal as well as soaring electricity costs amid power outages.

The companies added that while the industry’s production has halved to around 168 tons in the past decade, employment levels have declined by around 30% to 119,000 jobs, adding to the already-high levels of unemployment in South Africa.

5 Comments

Douglas Walker

June 30, 2015 at 4:03 am

Good luck, 100% increase in wages? What world do they think they are living in? Unions like to talk about company greed, time for them to look in the mirror.

Gary

June 30, 2015 at 4:35 am

The culture in South Africa over the last 20 years or so has shown that striking pays off. The employer always caves in eventually. The fact that two-three years down the line this normally leads to lay-offs is not considered by the employees, a bird in the hand so as to speak

David

June 30, 2015 at 5:42 am

The South African Miners would need a 1,000.00% pay increase to be paid the same as a miner in Australia.

Koos

June 30, 2015 at 6:43 am

I’ve said it before. These morons should remember to wake up when they get out of bed in the mornings. Ridiculous they are!!!

Witte Boer

June 30, 2015 at 8:48 am

So they will strike for 2 months and then accept the original offer. They will never in their working life recover the lost earnings during the strike. A few months down the line the mines will do an economic revaluation and retrench a few thousand workers. Maybe even see a few protesters getting shot again. We have seen the whole sorry saga before. Only an idiot keeps making the same mistakes and expect a different outcome…