• Conflict over water, coal

    SA's leaders have upped their support of the water-intensive coal industry, says Keith Schneider.

  • Cost of doing business

    The world can't afford the $4.7trn a year in environmental costs of business, says Mandi Smallhorne.

  • Voter paralysis

    With so much tilting voters against change, democratic reason is the loser, says Solly Moeng.

All data is delayed
See More

Gold strike bites as fuel dispute ends

Jul 28 2011 17:24

Company Data


Last traded 63
Change -4
% Change -6
Cumulative volume 926423
Market cap 0

Last Updated: 31-05-2016 at 05:00. Prices are delayed by 15 minutes. Source: McGregor BFA

Related Articles

Gold sector wage talks stall

Gold miners still negotiating

New strike threatens gold supply

Gold miners set to strike

De Beers sales up 33%

Coal sector wage talks fail

Emalahleni - A strike by South African fuel workers that slowed commerce and caused panic buying at the pumps ended on Thursday, just hours before 100 000 gold miners were to down tools in a move that could push up bullion prices.

Mediators said the union representing petroleum workers which was seeking 9.5% wage hikes had reached a deal with employers, who had offered 8%.

The country's annual strike season is in full swing with unions demanding 10% to 20% pay rises, well above 5% inflation. The strikes have already hit chemicals, coal and diamond mining with worries about economic damage increasing the longer they last.

Some 100 000 workers at AngloGold Ashanti, Gold Fields, Harmony Gold and another smaller mining group plan to walk off the job. The work stoppage could cost the sector about $25m a day in lost output at a time when the precious metal is trading near record highs.

Their share prices extended losses on Thursday.

Unions representing coal workers said they held "inconclusive" talks with the Chamber of Mine (COM) on Thursday and gold sector talks were set for Friday.

At Emalahleni, 100 km east of Johannesburg, thousands of striking coal workers vented their anger near an Anglo American operation.

"I've worked 38 years for this company and I still get only R3 700 a month. How am I supposed to survive with that? And my family?" said one striking worker, Joseph, 55, who declined to give his last name.

Coal companies hit by the strike include Exxaro Resources [JSE:EXX], Optimum Coal and Xstrata

Strikes typically last up to a few weeks, with the average recent settlements being about 8% annually. Employers, who see the wage deals as the cost of doing business, usually ramp up production after reaching new labour deals to try and make up lost production.

The biggest worries for the economy are strikes that stretch into mid-August, work stoppages that hit power utility Eskom, which provides almost all of the country's power, or affect platinum, with South Africa being the world's largest producer of the precious metal.

Gold fight

"There are no new offers just yet," said COM spokesperson Jabu Maphalala of the gold dispute. Wage talks on that front are to resume on Friday.

The National Union of Mineworkers (Num) is seeking 14% from the gold producers, who have offered between 7% to 9%. In the coal sector, the Num is seeking 14% while employers have offered 7% to 8.5%.

South Africa was once the global leader in gold production but now is fourth in the world due to dwindling grades and increasing depths. A short-term work stoppage is unlikely to affect the spot price, which hit an all-time high of $1 628 an ounce on Wednesday on US and European debt woes.

But analysts say a prolonged strike may push the price of bullion even higher.

Markets will also be watching the outcome of talks between the unions and Anglo American Platinum, the world's No 1 producer which accounts for about 40% of global output.

The Num is demanding an eye-popping 20% and Amplats' last offer was 4.6%.

"Even the threat of a strike sends a signal to investors that it is more dangerous to be short platinum, and that will in itself be supportive of prices," said David Jollie, an analyst at Mitsui Precious Metals in London.

Economist have warned that well above inflation settlements erode the country's global competitiveness by driving up the cost for a workforce that is already more expensive and less efficient than those in emerging market rivals.

Employers have also been shedding jobs to pay for the higher wage bills, driving up an unemployment rate already at 25%.

While wages in the mining sector - which employs more than a half million people - have increased by nearly 30% since September 2008, about 22 000 jobs have been cut.
num  |  exxaro resources  |  eskom  |  mining sector  |  wage increases



Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

We're talking about:


Debt is one of the biggest financial issues facing South Africans today. Find out how you can avoid and manage your debt with Fin24 and Debt Rescue.

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

The upcoming petrol price hike is:

Previous results · Suggest a vote