Thousands of S.African gold miners to strike over pay

AFP , Tuesday 3 Sep 2013

South African gold miners demand a wage increase ranging between 60 to 100 percent, demand parity with executives; disruption of work over strike will continue till Christmas

Tens of thousands of gold miners are set to go on strike Tuesday after wage talks broke down, threatening to cost millions of dollars in lost output in the troubled sector.

Powerful labour group the National Union of Mineworkers (NUM) -- which represents the bulk of 120,000 workers affected -- called for stoppages following its members' rejection of a 6.5 percent wage hike last week.

NUM spokesman Lesiba Seshoka said early Tuesday that the strike would kick off on the 6:00 pm (1600 GMT) shift. "We will go until Christmas," he told AFP.

The gold sector stands to lose 761 kilogrammes in production each day, worth around $34 million, gold industry spokeswoman Charmane Russell told AFP.

Gold workers are demanding wage increases of between 60 and 100 percent, denouncing company executives' high salaries while workers live in poverty in a country with one of the world's biggest wealth gaps.

"The pay that we are asking for is not high. It is normal and reasonable," said Seshoka.

"If there are bosses that sit in air-conditioned offices earning millions a year, why can't they (miners) earn 7,000 ($700) basic a month?"

The strikes will add to the pressure building on Africa's largest economy, where at least 75,000 workers in the construction and automobile industries have downed tools since last week.

The stoppages have become a frequent occurence during annual wage negotiations, but this year come amid sluggish growth and rampant unemployment.

"Our most important industry is in crisis and we have not yet found how to stem the tide of destruction," said Anglo American CEO Mark Cutifani in an opinion article in Business Day newspaper.

South Africa was for decades the world's largest gold producer, but its share of production has shrunk from 68 percent in 1970 to six percent of the world total last year.

Falling gold prices, a declining grade of ore and some of the world's deepest mines are all factors constrained gold firms' profits.

In part because of strikes, gold production last year fell by 12.4 percent to 167.2 tonnes -- its lowest level in over a century -- and cost the economy half a billion dollars.

But workers insist their dramatic pay demands are justified after a history of cheap black labour built the continent's most sophisticated economy.

"It is true that there are legacy issues that we must deal with," wrote Anglo American's Cutifani.

But as rival unions inflate wage demands in competition for members, he warned labour leaders against creating unrealistic expectations.

"Promoting expectations above the capacity of the industry to pay is a dangerous road that may have tragic consequences for employees who do not understand how close we are to economic devastation in certain sectors," he wrote.

Seven gold mining firms, including giants AngloGold Ashanti and Gold Fields, offered a maximum of 6.5 percent pay raise.

The industry's latest offer guarantees average pay of 9,170 rand ($882) a month and profit-sharing schemes.

But the NUM's Seshoka said the figure was misleading.

"They are combining everything, including medical aid and living out allowance," he said.

If the downward spiral continues, the gold sector may employ only 60,000 people by 2020, according to the Chamber of Mines.

But Cutifani said it had the potential to create 260,000 jobs by then if the industry, government and labour groups could reach a workable plan.

"We could make sure we help another 2.6 million South Africans out of abject poverty, he said."

Meanwhile strikes in other industries continue.

Around 11,000 "cheaply-exploited and underpaid" automobile workers will march in the capital Pretoria Tuesday, while 72,000 petrol station attendants hold off on stoppages pending wage talks.

Over 45,000 construction workers are also withholding labour for higher wages.

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