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South African Gold Miners Reject New Wage Offer
COINB0Y
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AFRICA NEWS JULY 14, 2009, 8:21 A.M. ET Strike Looms After South African Gold Miners Reject New Wage Offer
By ROBB M. STEWART - wsj
JOHANNESBURG -- Trade unions rejected an improved wage offer from South African producers AngloGold Ashanti Ltd. and Gold Fields Ltd., and warned Tuesday that workers will strike if a double-digit increase isn't tabled during the next round of talks.
Unions have been holding firm to demands for a 15% pay raise and have warned roughly 150,000 miners could down tools across South Africa, the world's third-largest producer of the metal behind China and the U.S.
AngloGold and Gold Fields, the continent's largest producers of the precious metal, made what the Chamber of Mines said was a final offer that would take the entry level wage for underground miners to 4,000 rand ($485) a month by the end of 2010, from 3,300 rand currently.
The chamber, which negotiates biennial wage packages on behalf of gold companies, said the two Johannesburg-based firms have offered all other employees an 8.5% wage increase in the first year, backdated to July 1, and consumer price inflation plus one percentage point in the second year. They had previously offered a 7% increase.
"The offer is totally rejected," said Lesiba Seshoka, spokesman for the National Union of Mineworkers. "We see it as an insult."
The NUM, Solidarity and UASA unions have said they will hold out for a better than double-digit increase for their members, at a time when Africa's biggest economy is struggling with its first recession in 17 years and official inflation eased to 8% on the year in May.
"If next week's talks fail, the unions will ask for a certificate to strike," Solidarity spokesman Jaco Kleynhans said. He added that another round of negotiations with the chamber is set for July 21, while unions will meet with Harmony Gold Mining Co. Friday.
Harmony, South Africa's third-largest gold producer, has entered talks with unions directly this year and has offered a package that includes a bonus linked to the performance of the gold price.
*****Gold miners last went on strike over pay in 2005, when more than 100,000 workers walked off the job for several days and paralyzed output in the country.****
Elize Strydom, negotiator for the Chamber of Mines, said the wage package on offer includes, among other things, an increase in the minimum allowance for living out of provided housing, as well as alternative surface work for pregnant workers.
"We believe that our final offer achieves a good balance between the sustainability of the companies and the demands of the unions," she said. "It is the best we can do under the circumstances."
Companies in 2007 offered a package that included a pay increase of 8.5% for most workers in the first year and a minimum 8% rise in the second.
Separately, construction companies, represented by the Federation of Civil Engineering Contractors, were locked in negotiations with trade unions Tuesday in an effort to bring to an end a strike by some 70,000 workers that has halted work on soccer stadiums for the 2010 World Cup, power stations, ports and the Gautrain rapid rail link between Pretoria and Johannesburg. The framework for a deal was agreed last week and has been taken for approval to union members, who downed tools last Wednesday.
Write to Robb M. Stewart at robb.stewart@dowjones.com
By ROBB M. STEWART - wsj
JOHANNESBURG -- Trade unions rejected an improved wage offer from South African producers AngloGold Ashanti Ltd. and Gold Fields Ltd., and warned Tuesday that workers will strike if a double-digit increase isn't tabled during the next round of talks.
Unions have been holding firm to demands for a 15% pay raise and have warned roughly 150,000 miners could down tools across South Africa, the world's third-largest producer of the metal behind China and the U.S.
AngloGold and Gold Fields, the continent's largest producers of the precious metal, made what the Chamber of Mines said was a final offer that would take the entry level wage for underground miners to 4,000 rand ($485) a month by the end of 2010, from 3,300 rand currently.
The chamber, which negotiates biennial wage packages on behalf of gold companies, said the two Johannesburg-based firms have offered all other employees an 8.5% wage increase in the first year, backdated to July 1, and consumer price inflation plus one percentage point in the second year. They had previously offered a 7% increase.
"The offer is totally rejected," said Lesiba Seshoka, spokesman for the National Union of Mineworkers. "We see it as an insult."
The NUM, Solidarity and UASA unions have said they will hold out for a better than double-digit increase for their members, at a time when Africa's biggest economy is struggling with its first recession in 17 years and official inflation eased to 8% on the year in May.
"If next week's talks fail, the unions will ask for a certificate to strike," Solidarity spokesman Jaco Kleynhans said. He added that another round of negotiations with the chamber is set for July 21, while unions will meet with Harmony Gold Mining Co. Friday.
Harmony, South Africa's third-largest gold producer, has entered talks with unions directly this year and has offered a package that includes a bonus linked to the performance of the gold price.
*****Gold miners last went on strike over pay in 2005, when more than 100,000 workers walked off the job for several days and paralyzed output in the country.****
Elize Strydom, negotiator for the Chamber of Mines, said the wage package on offer includes, among other things, an increase in the minimum allowance for living out of provided housing, as well as alternative surface work for pregnant workers.
"We believe that our final offer achieves a good balance between the sustainability of the companies and the demands of the unions," she said. "It is the best we can do under the circumstances."
Companies in 2007 offered a package that included a pay increase of 8.5% for most workers in the first year and a minimum 8% rise in the second.
Separately, construction companies, represented by the Federation of Civil Engineering Contractors, were locked in negotiations with trade unions Tuesday in an effort to bring to an end a strike by some 70,000 workers that has halted work on soccer stadiums for the 2010 World Cup, power stations, ports and the Gautrain rapid rail link between Pretoria and Johannesburg. The framework for a deal was agreed last week and has been taken for approval to union members, who downed tools last Wednesday.
Write to Robb M. Stewart at robb.stewart@dowjones.com
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Comments
An extended strike would ultimately juice the pog.
roadrunner