Tags: safrica | mining | strike | gold

SAfrica Gold Producers Make New Wage Offer

Thursday, 05 Sep 2013 07:01 AM

 

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JOHANNESBURG — South African gold producers made a new wage offer to tens of thousands of striking miners in a bid to end work stoppages that have crippled production since Tuesday, a union said.

Members of the National Union of Mineworkers (NUM) were discussing the offer, which was made late Wednesday.

"We received last night a revised offer from the Chamber of Mines," NUM spokesman Lesiba Seshoka told AFP. "We are looking at it," he said, cautioning that "there are no guarantees this offer can be accepted. It's up to the members."

He declined to give further details.

NUM, which officially represents around 70,000 strikers, has demanded a 60-percent hike in basic wages as it battles to remain the dominant labor group in the gold sector, though Seshoka suggested earlier in the week they may review their demands.

The producers' last public offer was 6.5 percent.

"Discussions continue," gold industry spokeswoman Charmane Russell told AFP, declining to confirm the offer.

For Thursday's morning shift, the firms represented by the chamber reported 16 of 23 mines were severely affected.

Seven South African gold mine producers employing some 107,000 workers have been affected by the strike, launched after collective bargaining talks collapsed last week.

The gold sector stands to lose $34 million in production daily as a result of work stoppages.

Two smaller firms sealed deals with their workers Wednesday. Evander Gold Mine and Village Main Reef agreed to increases of between 7.5 and 8.0 percent for around 5,000 affected workers.

Falling gold prices, a declining grade of ore and increased costs such as electricity and wages have drained gold firms' revenues.

"This is an industry that has largely lost its critical mass and disintegrated in the last six years," said economist Chris Hart of financial analysis firm Investment Solutions.

South Africa was for decades the world's largest gold producer, but its share of production has shrunk from 68 percent in 1970 to 6 percent of the world total last year.

Last year widespread violent strikes following a police crackdown at Lonmin's Marikana platinum mine left over 50 dead.

The NUM lost its dominance in the platinum sector to the radical Association of Mineworkers and Construction Union (AMCU), which is now challenging its position in the gold sector.

Partly because of stoppages last year, gold production fell by 12.4 percent to 167.2 metric tons — its lowest level in over a century — and cost the economy half a billion dollars.

But workers insist their dramatic pay demands are justified after a history of cheap black labor built the continent's most sophisticated economy.

Meanwhile Labor Minister Mildred Oliphant urged negotiators to reach an agreement soon.

"Wage negotiations should not necessarily result in strikes," she said in a statement on Thursday. "Even when a strike is called, at the end of the day the parties have to find a way [of] resolving the outstanding matters around the table."

Gold is a key industry for South Africa, bringing in around 10 percent of export earnings and accounting for three percent of Gross Domestic Product. The industry employs around 140,000 workers.

Strikes are common in the country's mid-year winter months, when wages are typically reviewed.

Tens of thousands of workers in various other sectors including the construction and automobile industries have also downed tools in recent weeks demanding higher pay.

South African economic firm Efficient Group, has predicted that industrial action could drag the country's economic growth from three percent registered in the second quarter, to below 1.5 percent before the end of the year.

© AFP 2014

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