South African gold miners reject wage offer

Striking gold miners have rejected the industry's latest wage offer, the National Union of Mineworkers (NUM) said on Thursday, confirming mining companies’ fears of labour unrest lasting longer than expected.

Africa’s gold sector leaders AngloGold Ashanti (NYSE:AU), Gold Fields (JSE, NYSE: GFI) and Harmony Gold (JSE:HAR), said Thursday they were willing to raise the entry level grade for miners, giving an additional “allowance” to rock drill operators and improving the packages of other categories of miners.

But the offers did not satisfy the striking workers, told SABC radio news NUM’s spokesman Lesiba Seshoka.

The offer to re-grade salaries, which was negotiated and accepted by unions last week, was considered a major breakthrough in efforts to end the violent strikes that have hit the industry.

AngloGold Ashanti, the world’s third-largest producer of gold by sales, has halted its entire operations in South Africa since it was hit by the labour unrest in September, with about 24,000 of its 35,000 workforce downing tools. It has said that the unrest is costing it the equivalent of about 30,000 gold ounces a week in lost production.

Gold Fields has strikes at two mines employing 24,000 people, while Harmony is dealing with a strike at one of its mines that accounts for about 14% of its total production.

In total 100,000 miners have been caught up in strikes across the mining sector, amid increasing concerns that the unrest will cause mines closure and lead to job losses.

Meanwhile violence near an Anglo American Platinum (Amplats) mine has escalated since the it fired 12,000 striking miners last Friday.

One person died Thursday in a hospital after being hit by two rubber bullets likely fired by police trying to disperse striking miners, told AP Gaddafi Mdoda, a leader of the striking Amplats mineworkers. Another person died of his wounds after being set alight by striking workers, North West police spokesman Thulani Ngubane said.

More than better pay

At the heart of the non-stopping labour unrest hitting South Africa there is something far more complex than low salaries, writes analyst Michelle Smith.

With a democracy less than 20 years old, the struggles of apartheid and the promises made at its end remain fresh. Mine workers view themselves as working in a profitable, dangerous industry. They tend to be frustrated by the government, which they believe has short-changed them, and with unions, which they see as more concerned with brushing shoulders with business leaders and politicians than representing their members’ deplorable living conditions.

On top of the mining strikes – which are concentrated in the platinum and gold sectors – truck drivers across the African nation have also started labour action which is putting pressure on fuel suppliers.

Image of striking gold miners from video shot last week.

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