South Africa’s main union rejects gold firms wage offer

South Africa’s main union rejects gold firms wage offer

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The National Union of Mineworkers (NUM), South Africa’s biggest gold-mining labour coalition, rejected Monday a first pay offer proposed by the country’s bullion producers, sticking to its demand for an increase of more than 80%.

South Africa’s gold companies, which bargain collectively under the country’s Chamber of Mines, want to avoid a repeat of last year’s five-month platinum strike. However, their ability to raise salaries is limited as they are already battling low metal prices and mounting electricity costs amid power outages.

“We remain committed to reaching an agreement based on the sustainability of the industry, and the retention of jobs,” the Chamber of Mines said in a statement on behalf of gold producers including AngloGold Ashanti (NYSE:AU), (JSE:ANG), Harmony Gold (NYSE:HMY), (JSE:HAR) and Sibanye Gold (NYSE:SBGL), (JSE:SGL).

It is estimated that the sector employs about 94,000 workers in South Africa.

According to the chamber, costs for gold miners between 2008 and 2014 jumped on average more 20% annually. Production over the past decade, instead, has steadily fallen by roughly 8% per year.