South African union rejects 13% pay hike; president threatens strike

The union representing about a third of nearly 100,000 gold miners in South African labour talks, has rejected an offer of a 13-percent pay rise.

The Association of Mineworkers and Construction Union (AMCU) hinted that a strike may be the next step in the long-suffering negotiations for a fair deal for employees and gold companies.

“If we need to go march at their offices we will,” AMCU President Joseph Mathunjwa told thousands of workers who gathered at the stadium next to a mine shaft about 300 kilometers (186 miles) south of Johannesburg, according to a Sunday post on Bloomberg.

Last Monday, South African gold companies tabled a five-year wage increase offer of as much as 13% to the industry’s unions, which said the proposed pay rise falls “way too short” of their demands.

Unions representing 94,500 gold miners want between an 80 and 100 percent salary hike from employers including AngloGold Ashanti (NYSE:AU), (JSE:ANG), Harmony Gold (NYSE:HMY), (JSE:HAR) and Sibanye Gold (NYSE:SBGL), (JSE:SGL).

Wages make up 55 percent of gold mining costs in South Africa.

Basic monthly pay is currently about 5,800 rand (US$457), but the AMCU union has demanded wages more than double to 12,500 rand. The largest gold-mining union, the National Union of Mineworkers (NUM), has lowered its demand to 9,500 rand, said Bloomberg.

Mining companies in South Africa feel squeezed by increasing costs as a result of the need to go deeper underground to mine the precious metal, and the gold price which has fallen 20 percent from 2015 highs of $1,313 an ounce.

The other three unions involved in the talks, NUM, Solidarity and UASA will respond to the wage proposal by Aug. 7, Elize Strydom, chief negotiator for the Chamber of Mines, told reporters on Friday.