A peace pact that would bring stability to South Africa’s mining sector is expected to be signed on July 3, Deputy President Kgalema Motlanthe said.

Bloomberg reported that the parties made commitments to conduct labor relations within the law and that the law had punitive measures that the government would enforce.

Motlanthe, a former general secretary of the National Union of Mineworkers (NUM), was tasked by President Jacob Zuma to lead industrial peace talks in the mining sector in a bid to end violent labour strife and restore investor confidence.

The government’s involvement came as the threat to the economy from the turmoil in the mining industry, largely the open warfare between the flagging NUM and the aggressively assertive Association of Mineworkers and Construction Union (Amcu), became inescapably apparent.
According to the Treasury, more than R10 billion in production was lost last year in the gold and platinum sectors as a result of illegal strikes.

“We must do away with violence and intimidation. We have a vested interest to ensure we create an environment for prosperity,” Motlanthe added.

Motlanthe’s initiative involves union bosses, mining chief executives and government ministers putting challenges and solutions for the sector on the table and committing to law and order.

“We have interacted with all stakeholders to put all problems on the table to find solutions and suggestions,” Motlanthe said.

Last year, 40 people were killed, including 34 who died in a police shoot out, in the turf war between the NUM and Amcu at Lonmin.

Amcu wants majority recognition at the world’s third largest platinum producer and had threatened to go on strike to force the company to finalize its recognition agreement, but backed down to make way for Motlanthe’s intervention.

Labor unions have tabled gold above inflation demands against a background of slumping gold prices.

The gold price has tumbled 26 percent since the beginning of the year.

Against the backdrop of plunging prices, this years’ negotiations are expected to be challenging with the trade unions demanding wage increases of between 60 percent and 100 percent.

Wage negotiations in the gold sector would start on July 11, the Chamber of Mines, which represents gold producers, said in a statement. Trade unions Amcu, NUM, Solidarity and Uasa will be part of the talks.

Meanwhile, Amcu marched outside Glencore Xstrata’s office in Johannesburg. Union president Joseph Mathunjwa said 1,000 miners dismissed from Glencore Xstrata’s chrome operation in Steelport, Limpopo, were owed shares in the business.

The union gave management seven working days to respond to the memorandum.