Labor talks could begin soon in South Africa

June 26, 2013

Four labor unions in South Africa representing mine workers filed wage demands with the South Africa Chamber of Mines. These demands will form the basis of the wage talks, Elize Strydom, the senior executive in charge of industrial relations at the chamber told the Wall Street Journal.

South Africa is likely to start official gold-mining wage talks sometime in the middle of July. The unions are demanding a 60 percent pay increase as labor relations are becoming tense once again.

“It is incumbent upon all of us to agree on a protocol on what we will negotiate, and what will be acceptable and won't be acceptable conduct,” Strydom said.

Wage contracts come to an end June 30, but she said even though wage negotiations are only likely to start in the middle of July, the results of those talks could be applied retroactively from July 1.

Executives have warned that the wage talks could be more hostile than those held two years ago, given the substantial cuts that mining companies are planning and the deaths of more than 50 people during illegal and violent strikes last year.

Compounding concerns over the repercussions of these cuts, unrest has also resurfaced in South Africa's volatile platinum belt after a union organizer was shot and killed in May, the Wall Street Journal reported.

Late last year violent clashes between striking workers and police upended South Africa’s mining industry, costing companies millions of dollars in lost revenue and prompting credit-ratings firms to review the risks of investing in the country. In the aftermath of a police shooting that killed 34 protesters, three ratings firms eventually downgraded South Africa's sovereign debt.

The Chamber of Mines represents gold miners such as AngloGold Ashanti Ltd., Harmony Gold Mining Co. Ltd. and Gold Fields Ltd. The four labor unions are The National Union of Mineworkers, The Association of Mineworkers and Construction Union, United Association of South Africa and Solidarity.

The mining industry’s two major unions, NUM and AMCU, are asking for a 60 percent rise and a more-than-twofold rise, respectively, in the minimum, entry-level salary for gold-sector mine workers. The NUM said it recognizes that gold prices are in decline but said salaries aren’t sustainable for workers.

AMCU has said the majority of South Africans have not benefited from a distribution of the wealth created within the mining industry and it would seek to address these challenges by demanding better wages and improved labor conditions.

Talks are likely to be more complex than the previous round, when only NUM represented workers in talks with gold-mining companies. This time around there will be four labor unions at the table, two of which are embroiled in a tense rivalry, as AMCU has risen to prominence and workers have become frustrated with the NUM and what they see as a cozy relationship with mine management.

 

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