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.
President Jacob Zuma addresses Lonmin miners, 22 Aug 2012. (Image from the Government of South Africa’s Flickr photo stream)
South Africa’s top gold producers say it is highly likely that unions agree to take the latest pay offer presented to them, as players try to avoid a new wave of strikes, such as the one that paralyzed the country’s platinum sector last year.
According to the Chamber of Mines’ lead negotiator, Elize Strydom, the unions are now in the process of presenting the offers to their respective members next week.
“We believe this is a generous offer which is above inflation and at the limit of what this industry can bear whilst remaining sustainable,” she said in a statement. “It is our final offer, and we hope our employees will accept it so we can move forward together to confront the challenges the industry faces.”
The improved proposal includes reducing the wage-deal term to three years from five and offering a basic pay higher than before. However, the increase of monthly pay doesn’t translate into higher benefits, and the offer only applies if all four unions agree to it, the companies said.
Bullion prices have slumped 10% since wage negotiations began late June, touching a five-year low and hurting companies already struggling due to higher output costs.
