South African gold miners launch industry-wide strike
JOHANNESBURG -- South African gold miners launched their first industry-wide strike in 18 years yesterday to demand higher wages in the world's biggest bullion producer, the country's main mining union said.
"I can say now that the strike is on," Gwede Mantashe, general secretary of the National Union of Mineworkers (NUM), said.
"All the workers who were due to go on the 6 p.m. shift are out, all the four companies [involved in failed wage talks] have been affected."
About 100,000 gold miners represented by the NUM will remain on strike until a solution is found, he said.
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Despite improved offers from two companies, last-minute talks failed to yield a deal, according to an official from the Chamber of Mines, which negotiates on behalf of gold producers.
Mr. Mantashe had said earlier even if any better wage offers were forthcoming, it would be too late to call off the strike.
South Africa's gold industry accounts for about 15 per cent of global output, and the mining sector contributes about 8 per cent to the nation's gross domestic product.
A strike would lead to the loss of around 28,000 ounces of gold production and 79 million rand ($15-million Canadian) in lost revenue per day, a Deutsche Securities analyst has estimated.
The failed wage talks are symptomatic of wider discontent in a country plagued by huge income gaps between the rich and mostly black poor more than a decade after the end of apartheid.
Recent weeks have seen a wave of work stoppages by city workers and supermarket clerks and a six-day stoppage by employees of the national airline.
Two unions called the strike after rejecting the latest offer by the Chamber of Mines, of a 4.5-per-cent to 5-per-cent wage increase plus bonus payments.
The Solidarity union with about 10,000 members will join the strike just before midnight tonight, and a third 15,000-strong union also will decide today whether to take part.
Unions are demanding a raise of between 10 and 12 per cent.
Wages make up about half of total costs in the labour intensive sector, the biggest in terms of mining employment.
The strike would paralyze the South African mines of the world's No. 2 gold producer AngloGold Ashanti Ltd., fourth-ranked Gold Fields Ltd., sixth-placed Harmony Gold Mining Co. Ltd. and South Deep, a joint venture of South Africa's Western Areas Gold Mining Co. Ltd. and Placer Dome Inc. of Vancouver.
In 11th-hour talks, AngloGold and South Deep offered wage hikes of between 5.25 per cent and 6.5 per cent, the NUM said. The union said it would seek out the views of its members on the new offer and respond this afternoon.
Frans Barker, head negotiator for the Chamber of Mines, said: "There was some informal contact between AngloGold and South Deep and the NUM, but there was no agreement."
"If the strike goes on for too long, the country will start feeling the impact, especially on its export account."
Miners, who descend more than three kilometres underground to drill ore in sweltering narrow tunnels, typically earn 2,500-3,000 rand ($472-$567) a month.
Mr. Mantashe said the NUM could consider a wage increase of between 7 per cent to 8 per cent, but such an offer would have to include a 1-per-cent increase in the miners' risk cover under their provident fund, and higher allowances for those living outside the gold companies' hostels.
Mining firms, which gave workers a 10-per-cent wage increase two years ago, say they cannot afford increases much above inflation, which is running below 4 per cent.
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