S.African unions, gold miners seek compromise to end strike

South African unions and gold producers appeared ready to compromise on wage negotiations on Wednesday, as a mining strike took its toll on one of the country’s key industries.

The National Union of Mineworkers (NUM), which represents around two thirds of the miners, hinted it might lower its demands, while two small gold producers reached a deal with their workers.

Evander Gold Mine and Village Main Reef agreed to increases of between 7.5 and 8.0 percent for around 5,000 affected workers, a development the gold producers’ chief negotiator Elize Strydom described as encouraging.

The NUM, which has been demanding a 60 percent pay hike, indicated there was room for manoeuvre, but denied media reports it could go as low as 10 percent. Employers are offering 6.5 percent.

“The NUM has not settled for a 10 percent (rise). That is not true, our demand stands, but we are open to negotiations,” spokesman Lesiba Seshoka told AFP.

Seven South African gold mine producers employing some 107,000 workers have been affected by the strike, launched after central bargaining talks collapsed last week.

Gold is a key industry for South Africa, bringing in around 10 percent of export earnings and accounting for three percent of Africa’s largest economy. The industry employs around 140,000 workers.

Ruling ANC party deputy president Cyril Ramaphosa urged the unions and operators “to spare no moment, no time, no energy … and find a solution to the strike.”

“Strikes are always resolved at the end of the day, the longer they take, the more it creates problems for all those involved,” Ramaphosa told AFP.

The gold sector stands to lose 761 kilogrammes in production each day, worth around $34 million (25 million euros), as a result of work stoppages, gold industry spokeswoman Charmane Russell said.

No violence was reported, but production at mining giants such as Harmony Gold was severely affected by the stoppage, while Anglo Gold Ashanti reported significant to severe impact, according to the Chamber of Mines.

The NUM’s more radical rival, the Association of Mineworkers and Construction Union (AMCU) which has slightly over 20 percent of the membership in the affected gold mines, will meet at the weekend to decide on demands to put forward.

“All that AMCU will demand is a living wage,” its leader Joseph Mathunjwa said to AFP.

Harmony’s chief executive Graham Briggs pledged to “continue to engage with all the unions to reach a wage settlement and to curtail the strike.”

Stoppages in the mining sector have become a frequent occurrence during annual wage negotiations, but this year they come amid sluggish growth and rampant unemployment.

South Africa was for decades the world’s largest gold producer, but its share of production has shrunk from 68 percent in 1970 to six percent of the world total last year.

Falling gold prices, a declining grade of ore and some of the world’s deepest mines are all factors that have constrained gold firms’ profits.

In part because of strikes, gold production last year fell by 12.4 percent to 167.2 tonnes — its lowest level in over a century — and cost the economy half a billion dollars.

But workers insist their dramatic pay demands are justified after a history of cheap black labour built the continent’s most sophisticated economy.