South African miners demand gold companies to more than double their wages

South Africa’s fastest-growing mining labour coalition, the Association of Mineworkers and Construction Union, has called for gold producers to more than double the wages of entry-level miners and improve severance packages.

In a letter to the country’s Chamber of Mines the AMCU requests all gold firms to increased the minimum monthly entry-level salary for underground workers to $1,375 ($12,500 rand), up from the existing base wage of around $500 ($5,000 rand), BDlive reports.

For surface workers, the union is asking for $1,150, almost three times more than the current base salary of between $435 and $445 a month, according to data provided by the Chamber of Mines.

“The majority of the people have not yet benefited from the distribution of the wealth created within the mining industry,” said Jeffery Mphahlele, AMCU’s General Secretary in the letter to the Chamber of Mines, according to Reuters. “Our negotiating agenda for 2013 therefore seeks to address the above-mentioned socio-economic challenges, by demanding a living wage and improved conditions of employment,” he added.

The petitions outlined by the AMCU —the largest union in the South Africa’s gold industry after the National Union of Mineworkers— comes a few days before the start of the sector’s salary negotiations due to begin later this week.

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

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A decade ago, when gold prices were below $300 an ounce, most companies were at ease. Currently, even is bullion prices fall below $1,300 an ounce, as it happened last week, several miners are already operating at a loss.

The chamber said the NUM, which represents about 64% of the gold sector’s workforce, has submitted salary demand increases of nearly 60%. In comparison, last year’s increases ranged somewhere between 7% and 15%.

South Africa’s chamber of mines represents the country’s main gold producers, such as AngloGold Ashanti (NYSE: AU) (ASX: AGG), and Gold Fields (NYSE: GFI).

Image of miners during a break in South Africa by 

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