Most striking miners in South Africa accept offer

September 9, 2013

Some of the labor unrest in South Africa came to an end over the weekend as more than 60,000 gold miners accepted an 8 percent pay increase, ending a 48-hour strike.

The increase, which equals about 5,400 rand (US$540) month for entry level workers is 33 percent below the 8,000 rand that the National Union of Mineworkers (UNM) asked initially for, Bloomberg reported. The UNM represents two thirds of the gold miners in South Africa and the offer was accepted by most of them. Some miners working at Harmony Gold Mining Co have not accepted the offer, according to spokesman Lesiba Seshoka.

According to the country's Chamber of Mines, had the offer not been accepted the industry might have been set back as much as 349 million rand ($34 million) day in sales, but it does not mean there are not still issues to address. The Association of Mineworkers and Construction Union, an NUM rival that speaks for 20 percent of the industry’s 107,000 gold employees, is yet to see the offer and was to meet Sept. 8 to discuss its response, President Joseph Mathunjwa said. The AMCU has asked for 12,500 rand a month.

The wage deal is “a little more than employers would have preferred,” the chamber’s chief negotiator, Elize Strydom, said in the statement. “The agreement has helped us prevent a longer period of damaging industrial action and remains a reasonably balanced outcome in terms of affordability and jobs preservation.”

Employees who are not entry-level or rock drill operators will receive a 7.5 percent increase backdated to July 1, the chamber said in an emailed statement. Inflation-linked increases from July 2014 and a housing allowance increase to 2,000 rand from 1,640 rand are also included in the agreement, the chamber said.

South Africa’s annual consumer price inflation rate was 6.3 percent in July, according to data compiled by Bloomberg. Sibanye CEO Neal Froneman said any increase above CPI isn’t sustainable in the long-run on Aug. 13.

AngloGold’s six mines reported normal shifts, according to the NUM’s Seshoka and an update posted on the chamber’s website. The company is focusing on resuming output safely, it said in a statement. Two of Sibanye’s three sites are operating today and the remaining mine will resume operations this evening, spokesman James Wellsted said.

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