Gold industry braces for onslaught David McKay Posted: Tue, 29 Mar 2005
Ferdi Dippenaar, Harmony
[miningmx.com] -- IT IS customary for unions to hang tough ahead of annual wage talks with South Africa’s gold producers. But even by their standards, calling for a 10% wage hike is playing hardball. That’s likely to be the opening salvo when gold producers, represented by the Chamber of Mines of SA, and the National Union of Mineworkers (NUM), among others, sit down to talk wages for 2005/2006 during the course of next month.
The word from the unions is that they won’t tolerate talk of wafer thin margins. In an interview with Bloomberg, Gwede Mantashe, general secretary of the NUM, said: “If they’re trying to instil fear in us, they will not succeed. The more they talk about retrenchments, the more I feel we shouldn’t get less than 10%. Our view is that there’s no crisis.”
But hard talk couldn’t come at a worst time for SA’s gold industry, which has haemorrhaged billions of rand in cash over the past 24 months amid an appreciating rand. Making matters worse, marginal gold producers have been unable to support the loss making, resulting in thousands of retrenchments since January 2004 – with thousands more likely.
Harmony Gold says that it could retrench up to 4 900 jobs at four mines in the Free State after retrenching about 9 000 workers from its marginal shafts last year. DRDGOLD is preparing to axe 5 600 workers as it seeks the liquidation of its North West province shafts. Suggestions of mere restructuring at these shafts provoked NUM to demand the company lose its mining licence. There’s no knowing how DRDGOLD’s latest actions will up the ante with unions.
Talks with mining unions are infamously hard-boiled. It may now be the stuff of urban legend, but it’s understood that unions only commence talks late in the afternoon when management has been slaving over hot desks since the early hours. In contrast, union representatives have been resting.
And when discussions are held in union offices, the air-conditioning units are switched off. Talks are suspended, usually regarding some picked-over impasse, and reconvened well into the evening. After a week of such ardour, management is, understandably, pushed to its human limit.
Just ask DRDGOLD, which has had to endure front page negative press from all corners only days after preparing to again restructure its North West province shafts, coverage believed to be inspired by unions. The NUM is powerful, resilient and prepared to play dirty for its members.
Harmony Gold’s marketing director Ferdi Dippenaar expects strike action will be commonplace in the weeks ahead. Says Dippenaar: “We could see high wage demands in a low inflation environment. Just look at the 7,5% increase given to truck drivers recently.”
Dippenaar says that above-inflation improvements have been a function of narrowing the difference between labour and management pay standards over the past few years. But now it needs to stop. “Now the industry has to pay only what it can afford.”
SA’s last widespread mine strike was in 1987, when 300 000 miners downed tools for about three weeks, Bloomberg reports. One in 10 ended up sacked and production of about 250 000oz of gold was delayed. It’s worth noting that unions demanded 20% wage increases when they sat with management two years ago.
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