South Africa gold producers raise pay offer

South African gold producers raised their pay offer for miners on Tuesday, averting a possible strike for now, the mineworkers unions said.

The threat of a gold miners’ strike has added to a wave of industrial action, raising pressures on newly elected President Jacob Zuma to adopt a more leftist approach to economic policy.

The National Union of Mineworkers (NUM) — South Africa’s biggest union — said gold employers raised their offer to between 9 and 10.5 percent from the last proposal of an increase of between 8 and 10 percent.

The employers have also offered to raise the minimum wage to 4,000 rand, the union said.

“We are going to consult our members and then revert back to (the employers),” NUM spokesman Lesiba Seshoka told Reuters.

The union is demanding a 15 percent wage hike, nearly double South Africa’s last measured inflation of 8 percent.

Asked whether a strike could still happen, he said “I cannot rule out that possibility.”

Smaller Solidarity union said it would recommend that its members take up the offer, especially as it would award a double-digit rise for lower tier workers.

“We think it’s a good offer … (It) is a win-win situation and a strike has been averted in the gold mining industry,” Solidarity spokesman Reint Dyekama told Reuters.

The talks will resume on July 28.

South Africa’s powerful unions helped propel Zuma to power in an April election on a pro-poor platform and they are using their most powerful weapon — strikes — to push their agenda.

Zuma has vowed to keep pro-business policies credited with fuelling Africa’s biggest economy under predecessor Thabo Mbeki, but investors are watching for signs of rising union influence.

“If we see the closing down of our gold mines, it would have a catastrophic effect, not only on the mines but also on government revenue, because the gold mines still provide quite a lot of tax,” said Executive Research Associates analyst Nel Marais.

RECESSION

The smaller Solidarity union also turned down an offer from employers last week, calling it “unacceptable”.

Analysts say companies may be forced to cut jobs if workers insist on pay increases as high as 15 percent.

“If wages go to certain levels, management could revalue their operations and retrench more people, but I hope common sense will prevail,” said Stephen Roelofse, a Cape Town-based gold analyst at Metropolitan Asset Managers.

Three South African unions are holding talks with gold producers under the guidance of a mediator after failing to agree on wage increases.

South African gold producers including AngloGold Ashanti, Gold Fields and Harmony negotiate as one under the country’s Chamber of Mines.

Wage negotiations in the platinum sector are continuing with no specific threat yet at the world’s No. 1 and 2 producers Anglo Platinum and Impala Platinum.

Coal sector employers have made an improved wage offer to workers of between 9 and 11 percent this week, NUM said.

Other sectors, including chemicals, paper and the national broadcaster, have been hit by a string of strikes, which have come as South Africa tackles its first recession in 17 years.

This month, thousands of construction workers paralysed work on 2010 soccer World Cup stadiums during a week-long strike that was eventually settled with a 12 percent wage increase.

Source: Reuters