SAfrica gold miners say start country-wide strike

By James Macharia

JOHANNESBURG (Reuters) – South African gold miners launched
their first industry-wide strike in 18 years on Sunday to
demand higher wages in the world’s biggest bullion producer,
the country’s main mining union said.

“I can say now that the strike is on,” Gwede Mantashe,
general secretary of the National Union of Mineworkers (NUM),
told Reuters. The union had said the strike would start across
the country at 6 p.m. local time (1600 GMT).

“All the workers who were due to go on the 6 p.m. shift are
out, all the four companies (involved in failed wage talks)
have been affected.”

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

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.

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

A strike would lead to the loss of around 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 percent wage rise
plus bonus payments.

STRIKE MAY SPREAD

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 percent.

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

The strike would paralyze 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 .

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,
told Reuters: “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 3 km (nearly 2 miles)
underground to drill ore in sweltering narrow tunnels,
typically earn 2,500-3,000 rand ($387-$464) per month.

Mantashe said the NUM could consider a wage increase of
between 7 to 8 percent, but such an offer would have to include
a 1 percent 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 percent wage rise two
years ago, say they cannot afford rises much above inflation,
which is running below 4 percent.