South Africa’s waning gold industry braces for more strikes

2
531

JOHHANNESBURG — South African gold miners plan to strike for higher pay from tomorrow (Tuesday), inflicting more damage on an industry that has produced a third of the bullion ever pulled from the earth, but is now in rapid decline.

Reuters

The National Union of Mineworkers (NUM), which represents almost two- thirds of the country’s 120 000 goldmine workers, served the mining firms notice of the strike starting from tomorrow night shift, the companies said.

Negotiations broke down last week, with the unions and companies still poles apart over pay. The Chamber of Mines, which negotiates on behalf of the companies, said it made a final offer to increase basic wages by 6% to 6,5%.

The NUM is seeking 60% and rival union Association of Mineworkers and Construction Union (AMCU) wants as much as 150%. The companies say those demands are unrealistic, given rising costs and falling bullion prices.

In a sign of the industry’s frustration over the deepening crisis, Chamber of Mines president Mark Cutifani choked back tears on Thursday as he made an emotional appeal for an end to the violence and rounded on “thugs and murderers” he accused of stoking the unrest.

The unions seem determined to end what they see as a culture of low pay dating back to the apartheid era when impoverished black miners migrated to the industry’s heartlands for jobs to feed their families back home.

White rule ended in 1994 and the unions say miners who risk their health toiling far below ground are due for a bigger share of the spoils from a multi-billion-dollar industry.

But capital may have the edge over labour.

The companies have abundant cash and other resources, while most mine workers must feed several dependants and cannot go long without pay.

Wildcat strikes have shaken the industry since early last year, coupled with outbreaks of violence linked to a turf war between the NUM and the hardline AMCU.

The mining crisis has triggered damaging credit rating downgrades for Africa’s largest economy and criticism of President Jacob Zuma and the ruling African National Congress (ANC) over their handling of the violence that left dozens dead.

This time around, the miners will down tools legally, offering some solace to nervous investors.

Zuma and the ANC are keen to keep a lid on the labour unrest and potential job losses ahead of elections in 2014.

“The employers will continue to make plans in anticipation of strike action, to ensure the continuation of essential services, and to ensure the safety and security of employees and assets,” the mining companies said in a statement.

“The employers remain open to discussions with all unions and urge them to engage in good faith to reach an outcome that is acceptable to all,” it said.

Affected companies include AngloGold Ashanti, Gold Fields, Harmony Gold, Sibanye and some smaller operations.

Wage talks have also broken down with AMCU and other unions, but they have not yet signaled an intention to strike.

A gold industry shutdown could cost South Africa more than $35 million a day in lost output, according to calculations based on the spot gold price and a Chamber of Mines estimate that the sector would stop producing about 760kg a day.

This will put pressure on a struggling economy already weighed down by ongoing strikes in auto manufacturing, construction and aviation services, and facing potential strikes by textile workers and petrol station employees.

2 COMMENTS

  1. South Africa can go into Hyperinflation if Zuma can’t manage to supress this insane
    salary theatre soon. All these Countries such as Saouth Africa have thought they can blackmail the rest of the World with their Commodities, il advised by their leaders and perhaps countries as such as Russia and China who made them feeling they now could act against interests of USA and Europe. But since things have changed in the USA and these countries running out of patience with this blackmailimng nonsense, the boomerang effect is now taking place and the backlash could really destroy South Africa as well as all other Bric’s.

Comments are closed.