South African gold companies tabled Monday 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 93,000 gold miners want between 100% and 80% salary hike from employers including AngloGold Ashanti (NYSE:AU), (JSE:ANG), Harmony Gold (NYSE:HMY), (JSE:HAR) and Sibanye Gold (NYSE:SBGL), (JSE:SGL).
AngloGold Ashanti offered to raise entry-level workers’ pay by 13% starting July 1, while Sibanye Gold Ltd. and Harmony Gold Mining Co. proposed 11% and 7.8% respectively These offers, noted the miners in a joint statement, are significantly above-inflation rates, which hit 4.6% in May.
Wages make up 55% of gold mining costs in South Africa.
The majority union, the National Union of Mineworkers (NUM) hinted last week that it could work with an offer of 20%, but today’s proposals did not satisfy its leaders.
“As far as the increase in wages is concerned, they are very far from what we are demanding,” NUM General Secretary David Sipunzi told Bloomberg. “The indication is that we might not even meet halfway with the employers and therefore they are pushing us towards a strike.”
Prepared to strike
South Africa’s largest union, the Association of Mineworkers and Construction Union (AMCU), added it wouldn’t accept any offer that its members disagree with, warning they are prepared to strike.
Gold producers in the country are already battling low prices for the coveted, yellow metal as well as soaring electricity costs amid power outages.
The companies added that while the industry’s production has halved to around 168 tons in the past decade, employment levels have declined by around 30% to 119,000 jobs, adding to the already-high levels of unemployment in South Africa.