South African gold miners go on strike

South African gold miners have launched their first industry-wide strike in 18 years to demand higher wages in the world's biggest bullion producer, the country's main mining union said.

    Gold miners work in tunnels up to 3km underground

    "I can say now that the strike is on," Gwede Mantashe, general secretary of the National Union of Mineworkers (NUM), said on Sunday. The union had said the strike would start across the country at 6pm local time.

    "All the workers who were due to go on the 6pm shift are out, all the four companies have been affected."

    Around 100,000 gold miners represented by the NUM would remain on strike until a solution was found, he said.

    Key sector

    Despite improved offers from two companies, last-minute talks failed to yield a deal, according to an official from the Chamber of Mines, which negotiates on behalf of gold producers.

    Mantashe had earlier said even if any better wage offers were forthcoming, it would be too late to call off the strike.

    There is much discontent
    among the poor in South Africa

    South Africa's gold industry accounts for about 15% of global output, and the mining sector contributes about 8% to the nation's gross domestic product.

    A strike would lead to the loss of 28,000 ounces of gold production and 79 million rand ($12.21 million) in lost revenue per day, a Deutsche Securities analyst has estimated.

    The failed wage talks are symptomatic of wider discontent in a country plagued by huge income gaps between the rich and mostly black poor more than a decade after the end of apartheid.


    Recent weeks have seen a wave of work stoppages by city workers and supermarket clerks and a six-day stoppage by employees of the national airline.

    Two unions called the strike after rejecting the latest offer by the Chamber of Mines, of a 4.5 to 5% wage rise plus bonus payments.

    "If the strike goes on for too long, the country will start feeling the impact, especially on its export account" 

    Frans Barker, head negotiator for the Chamber of Mines

    The Solidarity union with about 10,000 members will join the strike just before midnight on Monday, and a third 15,000-strong union will decide on Monday whether to also take part.

    Unions are demanding a rise of between 10 and 12%.

    Wages make up around half of total costs in the labour intensive sector, the biggest in terms of mining employment.

    The strike would paralyse the South African mines of the world's No 2 gold producer AngloGold Ashanti, fourth-ranked Gold Fields, sixth-placed Harmony Gold and South Deep, a joint venture of South Africa's Western Areas and Canada's Placer Dome.

    Wage increase demand

    In 11th-hour talks, AngloGold and South Deep offered wage hikes of between 5.25 and 6.5 percent, the NUM said. The union would seek out the views of its members on the new offer and respond on Monday afternoon.

    Frans Barker, head negotiator for the Chamber of Mines, said: "There was some informal contact between AngloGold and South Deep and the NUM, but there was no agreement."

    "If the strike goes on for too long, the country will start feeling the impact, especially on its export account." 

    Miners, who descend more than 3km underground to drill ore in sweltering narrow tunnels, typically earn 2500-3000 rand a month.

    Mantashe said the NUM could consider a wage increase of between 7 to 8%, but such an offer would have to include a 1% increase in the miners' risk cover under their provident fund, and higher allowances for those living outside the gold companies' hostels.

    Mining firms, which gave workers a 10% wage rise two years ago, say they cannot afford rises much above inflation, which is running below 4%.

    SOURCE: Reuters


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