July 27, 2011 / 2:07 PM / in 9 years

FACTBOX-S.African wage talks in mining sector

July 27 (Reuters) - South Africa’s powerful National Union of Mineworkers (NUM) is set to strike on Thursday over wages at the country’s top three gold producers and one junior miner at a time when the price of the precious metal is near record highs.

In another labour dispute, coal miners walked off the job from the overnight shift on Sunday.

Following a pattern of recent years, many of the union demands are far above the official inflation rate, which was 5.0 percent in June.

Companies say they can ill-afford steep increases as they grapple with other rising costs.

But the official inflation rate does not tell the whole story for many miners, who are lower or mid-income workers with many dependents and spend much of their take-home pay on food and fuel, costs of which are rapidly rising.

Some economists warn that rising labour costs are eroding South Africa’s status as an investment destination since its workforce is already more expensive and less productive than those found in many of its emerging market rivals.

Following are some of the current disputes in mining in South Africa, the world number one platinum producer and a top producer of gold as well as a major supplier of coal to Europe and Asia.


Around 90,000 to 100,000 gold miners, or close to a fifth of the country’s mining labour force, are set down tools on Thursday, according to Reuters calculations based on company figures.

AngloGold Ashanti , Gold Fields and Harmony are respectively the world’s third, fourth and fifth largest gold miners and analysts have said a strike in their shafts could further support bullion’s price at a time when it is seen as a safe haven from U.S. and European debt woes.

NUM wants a 14 percent increase in wages. Gold employers have offered between 7 and 9 percent. The Chamber of Mines is negotiating with the unions on behalf of gold miners.


Coal miners walked off the job late on Sunday and Monday. Unions said they would meet with the coal producers again for further talks Thursday. Coal miners are also being represented by the Chamber of Mines.

Anglo Thermal Coal SA , Delmas Coal, Exxaro , Kangra Coal, Optimum Coal and Xstrata Coal are the main coal companies involved.

NUM is seeking a 14 percent raise from coal miners while the companies via the chamber have upped their offers to 6 to 8.5 percent.


NUM is demanding a 20 percent wage increase from Anglo American Platinum , the world number one producer of the crucial metal used for making catalytic converters in cars. The company’s last public offer was 4.6 percent. The union and Amplats will meet for further talks on Thursday.

A strike at Amplats could threaten its 2011 production target of 2.6 million ounces and could push the price of platinum up as the company accounts for about 40 percent of global production.

NUM has also rejected a 5.5 percent wage offer from the world ‘s number two platinum producer Impala Platinum . The union wants a 14 percent increase for lower categories and 13.5 percent for higher earning workers. The parties are meeting again on Monday next week. (Compiled by Olivia Kumwenda and Ed Stoddard)

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