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Gold producers table wage offers, lament dire conditions

Jul 18 2018 18:20
Sibongile Khumalo

Gold producing companies engaged in wage bargaining talks with unions have tabled pay increase offers ranging from 3% for skilled workers and 5.5% for underground employees, the industry body said on Wednesday.

The four producers, AngloGold Ashanti [JSE:ANG], Harmony Gold [JSE:HAR], Sibanye-Stillwater [JSE:SGL] and Village Main Reef [JSE:VIL] offered increases of 3% and 4.5% for miners, artisans and officials and 5.5% to 6.5% for category 4 underground employees.

Addressing the forum, the Minerals Council of South Africa Chief Negotiator, Motsamai Motlhamme, lamented the challenges impacting the sector - such as the stagnant gold price, a volatile gold price and rand-dollar exchange rate which affects long-term planning, investment and production.

“The industry has sought to find a balance between employees’ expectations and preserving the long-term viability and sustainability of the industry,” said Motlhamme.

The unions put forward a total of 137 demands, of which 62 have significant cost implications for the companies, according to the employers.

The industry also cited policy and regulatory uncertainty, which they said hampered investment confidence and increased the cost of capital. 

South Africa is in the process of finalising the controversial Mining Charter which is set to change the face of the industry through improved requirement of black participation.

Harmony, the country’s third largest gold producer, which employs the largest number of workers said it would adjust wages by R500 for the first year, which equates to a 6.5% hike on basic pay for underground employees in category 4 to 8.

The salaries will be adjusted by R525 for the second year and R550 for third year.

Harmony’s offer was the largest of the three companies.

AngloGold Ashanti and Village Main tabled the same offer for category 4 to 8 underground workers, starting at 5.5% adjustment (R450) for the first year to R475 for second year and R500 the third year.

Sibanye-Stillwater, which has been hit by stoppages due to deadly underground incidents offered R450 in the first year which equates to a 5.6% increase on basic pay and R450 and in the second year and R475 in the third year.

The workers are represented in the talks by unions the Association of Mineworkers and Construction Union (AMCU), National Union of Mineworkers, Solidarity and UASA.

Solidarity General Secretary Gideon Du Plessis said in a statement that the union was disappointed that the Minerals Council had rejected most of the trade unions' demands.

“The Council even rejected demands which do not have any financial implications such as Solidarity’s demand pertaining to worker presentation at company boards, a principle which is in line with the draft mining charter,” Du Plessis said.

The NUM was demanding that salaries of entry level surface workers be adjusted to up to R9 500, with R10 500 for entry level underground employees and a 15% hike for all officials.

In stressing the dire operational changes challenges they face, the companies cited the increasing depth of operations, ageing infrastructure, greater distances to working areas and declining grades which contribute to a “consistent decline in production and escalating cost pressure.”

The companies involved in the centralised collective bargaining forum employ around 80 000 employees.

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