South Africa union agrees gold mine pay deal as most strikers return

Reuters News
Posted: Oct 25, 2012 9:21 AM
South Africa union agrees gold mine pay deal as most strikers return

By Sherilee Lakmidas

JOHANNESBURG (Reuters) - South Africa's gold mines agreed a wage deal with unions on Thursday as the bulk of the gold sector's striking miners returned to work under threat of dismissal.

The returns marked success of a sort for a new tough approach by mining firms, but at least 12,000 gold and 20,000 platinum miners were still pursuing a wave of unofficial strikes that have cost Africa's largest economy over 10 billion rand ($1.14 billion) this year, according to the National Treasury.

About 100,000 workers in all have downed tools across South Africa since August in a wave of violent strikes that have triggered downgrades of South Africa's credit ratings, and awkward questions for President Jacob Zuma and the ruling ANC.

After three weeks of negotiations, the National Union of Mineworkers (NUM) and the gold industry, which employs around 157,000, announced agreement on wage increases of between 1.5 and 10.8 percent for different categories of mine workers.

Harmony Gold, South Africa's third-largest producer, said most of the 5,400 strikers at its Kusasalethu mine were now back at work. Strikes at Gold Fields' three mines are also now over.

"Stability in the gold mining industry has been achieved at many of the operations and there are hopes that this trend will continue," said Chamber of Mines executive Elize Strydom.

But AngloGold Ashanti, South Africa's biggest producer, said on Wednesday it had sacked around half of its 24,000-strong local workforce who had ignored an ultimatum to return to work or be fired.


And a six-week strike at Anglo American Platinum (Amplats), the world's top producer of the metal, is no closer to ending, with 20,500 workers at its Union and Amandelbult operations still holding out for higher wages.

Amplats has also sacked 12,000 wildcat strikers at its Rustenburg mines.

Zuma has come in for particular criticism for not responding faster to the August 16 police killing of 34 strikers at Lonmin's Marikana platinum mine, the bloodiest security incident since the end of white-minority rule in 1994.

Reluctant to take a hard line in the weeks after the "Marikana massacre", Amplats and then gold firms led by Gold Fields have since got increasingly tough with the strikers, issuing threats of mass sackings.

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Finance Minister Pravin Gordhan cut South Africa's GDP forecast for the year to 2.5 percent from 2.7 percent and said it would take the government some time to determine the full impact of the mining strife on growth.

"Declining mining output and the spread of strike activity has depressed activity in related industries including manufacturing, logistics and services, with negative consequences for GDP," the Treasury said in its interim budget policy statement.

In the year to August, mining output fell by 3.3 percent, with production of platinum group metals 15.3 percent lower, although strong iron ore demand from China helped offset some of the decline in the platinum, gold and coal sectors, it added.

Amplats on Thursday cut its full-year production target and capital expenditure plans after revealing that the walkouts had sliced 138,000 ounces off output, $217 million at today's price.

(Editing by Kevin Liffey)