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Thousands of S.African gold miners to strike over pay

Update: September, 03/2013 - 12:34

JOHANNESBURG, Gauteng – Tens of thousands of gold mineworkers are set to down tools Tuesday after wage talks broke down, threatening to cost millions of dollars in lost output in a declining sector.

Powerful labour group the National Union of Mineworkers (NUM) – which represents the bulk of 120,000 workers affected – called stoppages following its members' rejection of a 6.5 per cent wage offer last week.

"The strike is currently expected to start on the evening shift tomorrow (Tuesday) evening," gold industry spokeswoman Charmane Russell said on Monday. The declining industry would lose 761kg in production translating to US$34 million daily, she added.

The gold workers are demanding increases from 60 per cent to over 100 per cent, denouncing company executives' high salaries while workers live in poverty in one of the world's most unequal countries.

"We will strike until they revise their offer," said NUM spokesman Lesiba Seshoka.

New strikes will add pressure to Africa's largest economy, where at least 75,000 workers in the construction and automobile industries have downed tools since last week.

The stoppages have become normal during annual wage negotiations towards the middle of the year, but come at a bad time for a struggling mining industry and sluggish growth at home and abroad.

"Our most important industry is in crisis and we have not yet found how to stem the tide of destruction," said Anglo American CEO Mark Cutifani in an opinion article in Business Day newspaper on Monday.

South Africa once was the top global gold producer, but its share has shrunk from 68 per cent in 1970 to six per cent last year.

Falling gold prices, and the declining grade of ore that needs to be fetched in some of the world's deepest mines have constrained gold firms' profits. Wage strikes last year spread to the gold industry after a police crackdown on strikers at Lonmin's platinum mine in Marikana which killed 34 people in one day.

Gold production fell by 12.4 per cent to 167.2 tonnes – 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 labour built the continent's most sophisticated economy.

"It is true that there are legacy issues that we must deal with," wrote Anglo American's Cutifani.

But as rival unions inflate wage demands in competition for members, he warned labour leaders against creating unrealistic expectations.

"Promoting expectations above the capacity of the industry to pay is a dangerous road that may have tragic consequences for employees who do not understand how close we are to economic devastation in certain sectors," he wrote. Seven gold mining firms, including giants AngloGold Ashanti and Gold Fields, offered a maximum of 6.5 per cent pay raise.

The industry's latest offer guarantees pay of 9,170 rand ($882) a month and profit-sharing schemes.

If the downward spiral continues, the gold sector may employ only 60,000 people by 2020.

But Cutifani said it had the potential to create 260,000 jobs by then if the industry, government and labour groups could reach a workable plan.

"We could make sure we help another 2.6 million South Africans out of abject poverty, he said."

Meanwhile 11,000 "cheaply-exploited and underpaid" automobile workers will march in the capital Pretoria Tuesday, while 72,000 petrol station attendants hold off on stoppages pending wage talks. AFP

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