May 23, 2011 / 10:24 AM / in 6 years

UPDATE 2-SAfrica union wants 14 pct pay hike from gold miners

* Initial demand is only for one year

* Wage hikes above inflation have become the norm

* Industry says not sustainable


(Adds more details, industry body comment)

By Agnieszka Flak

JOHANNESBURG, May 23 (Reuters) - South Africa’s National Union of Mineworkers (NUM) said on Monday it would seek a 14 percent rise in salaries from gold and coal miners in upcoming wage talks.

“We are asking for a 14 percent (increase) across the board for companies in gold mining and coal mining,” said spokesman Lesiba Seshoka, adding that the demand is for one year.

“For the next year we will cross that bridge when we come to it,” Seshoka said.

The gold miners usually reach two-year wage agreements with the union and the current contract expires June 30. There is no date yet for the talks but the current deal expires at the end of June.

Labour relations in South Africa, the world’s largest platinum producer and a major gold producer, are strained.

South Africa’s chamber of mines, an industry body, said it was concerned by the demands for an above-inflation rise in salaries.

“We are concerned, particularly as the mining companies have gone to great lengths to share with all interested parties the severe cost pressures in the industry,” said Elize Strydom, the negotiator for the chamber.

South Africa’s inflation rate stood at 4.2 percent in April.

The union was also demanding a 45 percent increase in living out allowance, the industry body said.

“The demand for a new minimum monthly wage constitutes an increase of 25 percent,” Strydom said.

She added that the union’s demands will only serve to further erode the companies’ already tight margins and alienate investors.

The union was in meetings with the industry body that negotiates on behalf of the coal and gold miners, to discuss the talks.

Last year the union got an increase of 7.5 percent across the board from the sector. Earlier this month the union said it was also demanding a 14 percent rise in wages for its members at Impala Platinum, the world’s second-largest producer of the precious metal. The mining industry has warned that above-inflation wage demands could make the sector uncompetitive in the world’s top producer of platinum and a major supplier of gold and coal.

Harmony Gold finance director Hannes Meyer has told Reuters that consistent wage hikes above inflation were “not sustainable.” (Additional reporting by Olivia Kumwenda and Ed Stoddard)

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