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Zimbabwe’s diamond mineworkers want 250% pay hike

Former Finance Minister Tendai Biti said diamond revenues bypass state coffers

Zimbabwe’s mineworkers have taken a leaf from the playbook of their peers to the south, asking for a 100% pay hike for 2014 in annual wage negotiations.

Zimbabwe is the second largest producer of platinum globally behind South Africa with production of some 365,000 ounces expected this year.

The country also has the world’s second richest deposits of chrome and is a major supplier of diamonds.

Harare-based Associated Mine Workers Union of Zimbabwe wants employers to boost pay to a minimum of $800 a month for diamond-mine workers, $700 for platinum mines and $573 for gold and other mineworkers, while the Chamber is demanding an inflation-linked adjustment, according to position papers presented at the Nov. 26 meeting reports Bloomberg.

The current minimum wage for all mineworkers is $227 while annual inflation is running at 0.59% in the dollarized economy of the country which suffered years of hyperinflation during the last decade.

Rising labour costs would add to the headache of foreign miners operating in the country which under the country’s indigenization policy introduced in 2010 are compelled to sell or cede 51% of their local assets to black Zimbabweans or to the state.

In South Africa platinum workers have been threatening strikes over wage demands that at some mining companies would constitute a 60% pay hike. Labour disputes last year claimed up to 50 lives at South Africa’s platinum mines.

Together Zimbabwe, South Africa and Russia is responsible for close to three-quarters of the global supply of platinum group metals.

Despite being the world’s fourth-largest diamond miner, mainly thanks to the vast and rich Marange field, Zimbabwe has not been able to reap the full rewards of the industry.

Early this year the country’s former Finance Minister Tendai Biti accused diamond firms – many of them associated with the country’s military brass and president Robert Mugabe – of failing to pay tax revenues in full to the authorities, claiming only $40 million out of an expected $600 million reached government coffers in 2012.