Johannesburg - The head of South Africa's biggest mineworkers union said on Thursday its members were prepared to down tools in a bid to win a wage raise, but hoped for a deal to avert a strike.
"So far what we have been offered by employers is below inflation, we are still engaging them, but a strike will come if we see employers are not being reasonable," the National Union of Mineworkers (NUM) President Senzeni Zokwana told Reuters.
Unions and gold producers started meeting with a mediator this week to find common ground after workers demanded a 15% pay rise - well above inflation of 8.4% year on year in April - which gold companies say they cannot afford.
The mediator was called in after unions rejected an improved offer of 7% from gold producers, and warned of a strike.
"A seven percent wage increase is too low especially for lower earners," Zokwana, who was last month re-elected for another three year term at the helm of the NUM said.
"Despite the global economic crisis, the gold sector is still making money. Look at the price of gold."
Driven by investor interest, gold has defied the global economic decline, its price hit $1 005.40 on February 20, the highest since a record peak of $1 030.80 in March 2008. It stood at around $938 an ounce on Thursday.
Zokwana said "a deal could still be made" after Wednesday's first meeting with the Commission for Conciliation, Mediation and Arbitration (CCMA), which set out rules of engagement between the parties. Another meeting would be held in two weeks.
Gold producers, including AngloGold Ashanti, Gold Fields and Harmony, negotiate as one under the Chamber of Mines. The producers say the union's demand for the wage increase as well as other allowances would add to production costs and jeopardise the gold sector's survival.
A breakdown in the talks could set off a disruptive strike, hurting gold production in the world's third biggest gold producer, and dent falling production further.
Deaths, illegal mining
Zokwana said one consequence of poor pay in mines was the escalation of mining deaths, and illicit digging of gold.
"Entry level wages are too low at R2 600. These workers spend their whole day underground without seeing the sun and in dangerous conditions," he said.
"Sometimes workers sacrifice safety by working long hours and through fatigue to meet their bonus targets."
South Africa has a dire safety record in its mines, some of the deepest in the world. About 168 miners died last year in the country's mines, prompting the government to temporarily shut down mines whenever there is a death, reducing output.
He said owing to the poor pay, some miners had opted to quit their jobs and sought to make quick money in illegal mining.
At least 86 illegal miners died earlier this month from inhaling smoke and gases after a fire broke out at a disused gold mine in the Free State province owned by Harmony.
"The cream of these illegal miners are former mine workers. Only a miner who has been underground can know the ore from where to drill for gold," Zokwana said.
"The low wages push workers to resort to illegal mining."
On jobs, he said his union was working with the mining companies and the government to devise ways to cut job losses in a sector where about 24 000 jobs are on the line owing to the global slowdown, which has knocked down commodity prices.
"Jobs have been lost in platinum and especially in diamond mining, but we are urging employers not to let go of workers because they will need them when prices turn," he said.
- Reuters