South African gold miners’ union offers some compromise as strike bites

WESTONARIA, South Africa (Reuters) – A strike for higher pay hit production at most of South Africa’s gold mines on Wednesday, but the main union behind the stoppage said it was willing to relax some of its demands .

The stoppage called by the National Union of Mineworkers (NUM) began at the evening shift on Tuesday, with many miners refusing to go underground.

Producers grouped in the Chamber of Mines said output at 16 of the 23 mines currently involved in talks was partially or severely affected on Wednesday morning.

The operators of the mines include South Africa’s main producers AngloGold Ashanti, Gold Fields, Harmony Gold and Sibanye Gold.

“The majority of Harmony’s operations have been severely affected, although all essential services personnel are at work,” the company said in a statement.

However, the NUM, which represents two thirds of the country’s gold mine workers, has already opened the prospect of a compromise, saying it was prepared to lower its pay increase demands for some specific employee categories.

In another positive sign, junior producers Village Main Reef and Pan African Resources said they had made separate pay agreements with NUM members in their workforces.

The gold industry stoppage is seen costing South Africa around $35 million a day in lost production, adding to the nation’s economic woes as strikes over pay reduce output in other industries such as auto manufacturing.

“We’re not working,” said a striking miner at Gold Fields’ South Deep mine at Westonaria west of Johannesburg. “We’ll only go back down when we get our percentage that we’ve asked for. We’ve been begging them for too long now,” he added, asking not to be named.

Several gold mines visited by Reuters appeared quiet on Wednesday, with security guards refusing to let reporters into the properties.

The peaceful legal strikes contrasted with the often violent illegal stoppages that brought turmoil to South Africa’s gold and platinum mines last year, when more than 50 people were killed in labor clashes.

The mayhem slowed South Africa’s economic growth and led to sovereign credit downgrades.

The rand recovered from a fall on Tuesday, buoyed by hopes for a smaller than expected dent to foreign currency earnings if the strike ends soon, although it remains close to August’s four-year low of 10.51 against the dollar.

On Tuesday, President Jacob Zuma urged employers and unions to avoid another strike in the once iconic gold mining industry, which is now in rapid decline.

South Africa’s mines once accounted for close to 80 percent of the world’s gold production but its deep and dangerous shafts now only produce 6 percent.

“PREPARED TO MOVE”

NUM spokesman Lesiba Seshoka told SAFM radio on Wednesday that the union had told the employers’ Chamber of Mines negotiators: “‘If you are prepared to move, then we may be prepared to move,’”.

But Seshoka told Reuters the union still wanted a 60 percent increase in basic pay for entry-level underground workers, which would take it to 8,000 rand ($770) a month from 5,000 rand. The employers’ offer is for a 6.5 percent rise, just above the current inflation rate.

The union’s demands also included 15 percent pay rises for all other categories of workers and it was in this specific area that the NUM was willing to show flexibility, Seshoka said.