Unions divided over gold producers' wage offer

Wage talks between SA bullion producers and unions started in June with NUM and Amcu.

FILE: Wage talks between SA bullion producers and unions started in June with NUM and Amcu. Picture: EWN.

JOHANNESBURG - Unions at South African gold producers are divided over whether to accept a final wage offer and avert the kind of prolonged strike that affected the platinum sector last year.

Wage talks between South African bullion producers and unions started in June with the two biggest unions, which are arch rivals, setting wage increase demands ranging from 80 percent to over 100 percent for the lowest-paid workers.

AngloGold Ashanti, Sibanye Gold, Harmony Gold and two smaller producers, have offered wage increases of up to 17 percent, saying the sector is grappling with depressed prices, falling production and rising costs.

"The appetite generally for a strike or anything similar to what happened in platinum is not very high at these sort of offer levels," Neal Froneman, the CEO of Sibanye told reporters.

The platinum industry suffered a record five-month wage strike led by the Association of Mineworkers and Construction Union (Amcu) last year, which forced firms to close shafts.

Amcu's chief negotiator Jimmy Gama said the wage offer had been improved and this showed employers had a positive attitude towards talks, and said the union "will hold a mass rally to consult members on Sunday" about the proposed wage rise.

AMCU had originally said it would seek a monthly wage of R12,500 for workers who earning around R6,000.

The National Union of Mineworkers (NUM), which represents 52 percent of the workforce and had demanded wage hikes of 80 percent, said the latest offer was way too low.

"We are disappointed in this offer. It is undermining the integrity of the workers," said David Sipunzi, the general secretary of the NUM.

Solidarity union and UASA, which represent high-skilled workers, said they would consult their members and report back to the gold producers next week.

Sibanye Gold and AngloGold have offered an additional R1,000 a month to entry-level workers, and increase of 17.5 percent, while Harmony Gold's offered 500 rand a month for the lowest-paid workers and a gain share of 5 percent from profits on a quarterly basis.

South Africa's gold industry has been declining. According to the Chamber of Mines, costs between 2008 and 2014 rose on average by over 20 percent per year. Production over the past decade has declined by almost 8 percent annually.