South African gold producers declare labour dispute with miners: mediation needed

The Chamber of Mines of South Africa (CMSA) officially declared Monday the wage negotiations with unions representing gold miners have reached the status of dispute and so referred the matter to the Commission for Conciliation, Mediation and Arbitration (CCMA) for mediation.

The news come as the Association of Mineworkers and Construction Union (AMCU), the country's fastest-growing mining labour coalition, rejected a revised offer of a 5% increase in wages and benefits.

Analysts agree the outcome of the upcoming arbitration may push gold producers to leave South Africa or simply close down all operations, as costs continue to escalate.

According to South African labour laws, if the outside mediation fails, employees are allowed to go on a legal strike.

Earlier this month, the chamber’s chief executive officer, Bheki Sibiya, said a wage negotiation failure would likely destroy South Africa’s largest export industry and the nation’s credit rating.

“Neither the industry nor the country can afford yet another wave of calamitous workplace disorder that delivers additional global uncertainty and becomes the cause of further downgrades of South Africa’s sovereign credit rating,” Sibiya wrote.

South Africa’s two main mining sectors, platinum and gold, are under pressure from spiralling costs and weaker commodity prices. Their representatives have warned than any significant increase in wages will risk more job losses and trigger closures.