No deal: South Africa gold union NUM rejects final pay offer

There’s no denying the worth of gold and miners in South Africa are demanding to be paid accordingly. The country’s largest union has rejected the latest -- and final -- pay offer presented by the country’s top gold producers AngloGold Ashanti, Harmony and Sibanye Gold.

According to Bloomberg, the pay proposal would have increased wages as much as 11 percent for Harmony Gold’s lowest-paid workers and 15 percent for first year employees at Sibanye Gold and AngloGold Ashanti.

• Related content: South Africa mining unions reject latest offer from gold producers

“We have rejected the offer on the basis that it’s an allowance and not a wage increase,” Tafa Moya, a coordinator for the NUM, told reporters. “We are here to negotiate for wage increases and our members will only accept if it’s an increase.”

The second-biggest union for gold miners in South Africa, the Association of Mineworkers and Construction Union (AMCU), also rejected the offer.

“If we need to go march at their offices we will,” said AMCU President Joseph Mathunjwa.

The two unions are demanding wage increases in the neighborhood of 70 percent to more than 100 percent.

Speaking on behalf of the Chamber of Mines, Dr Elize Strydom, said: “We are extremely disappointed that our offers have not been accepted. Nonetheless, all parties have agreed to engage further in a mediated process led by the three senior independent facilitators who have thus far been acting as chairpersons during the course of the wage negotiations process.

• Related content: Gold prices could be affected if South Africa's mining union strikes

“We will be meeting again next week for two days to communicate further,” Strydom added.

Wage negotiations are expected to continue on Wednesday, August 12 and Thursday, August 13.

The National Union of Mineworkers (NUM) represents about 52 percent of employees at AngloGold Ashanti, Sibanye and Harmony, equating into more than 200,000 members.

Potential cuts

Declining commodity prices has forced major mining companies in South Africa into a bind. The industry, which contributes around seven percent of South Africa’s gross domestic product, is struggling to keep its head above water as rising cost and labor unrest continues to cause damage.  

Last week, Mines Minister Ngoako Ramatlhodi said Glencore had not followed legal procedure in its plan to cut 380 jobs and ordered the company to suspend operations at its Optimum coal mine until the issue was resolved.

Glencore, Kumba Iron Ore, Sibanye Gold, Lonmin, Anglo American Platinum and Impala Platinum have all said they plan to cut staff.

"The figure of the affected employees is 11,000 but that is not a final confirmation (that) all of them will be fired," William Mabapa, deputy general secretary of the NUM.

It’s becoming clear a strike is looming for South Africa’s gold mining industry. 

Stay connected! Follow us on Twitter and like us on Facebook 

Check out the latest edition of Mining Global