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South African mine employers to offer unions pay linked to gold price

Johannesburg — Gold employers will present a social package of welfare and training plus a financial plan for the survival of mines on the third day of talks next week in a bid to counter massive wage demands from the unions, the chief negotiator for the employers, Elize Strydom said Friday.

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It is a package tied up with a gold linked pay plan, that is unlikely to find favor with the unions.

Unions representing 93,000 gold mine workers will open talks on Monday for a new three year pay deal to come into force from July 1.

Employers at the talks will be AngloGold Ashanti, Harmony, Sibanye, Evander Gold and Village Main Reef.


The employers will argue that costs, largely due to rising power bills and wage increases, have gone up an average of 20% a year since the global recession in 2008.

Labor makes up 55% of gold mining costs, Strydom said.

Against this, the NUM is asking for an increase of 80% in entry level pay and AMCU wants to more than double entry level pay to Rand 12,500 (about $1,000) a month.

Just four years ago, negotiators for the employers were stunned when the NUM asked for an unprecedented 20%.

Unions settled for around half of that demand at the end of the 2011 talks.

This year, the employers will present their social package Wednesday which will include a welfare benefits, including increased living allowances, training in everything from health to debt management, plus a financial plan how much wages gold mines can stand without losing jobs, Strydom said.

A cash pay offer was unlikely to be made next week, but the employers would also put forward a plan Wednesday to give bonuses when the gold price goes up and discuss pay cuts, before job cuts, if it goes down, she said.

"We want people to share in the good times when the gold price has gone and feel the pain when it goes down. If it does, there will be talks about pay with the workers with retrenchments as the last option. Everyone must remember that unemployment is very high in this country and once a job is lost in mining it is very difficult to get another one," Strydom said.

The negotiators met with both major unions, the National Union of Mineworkers and AMCU, this week to float the plan.

"We don't need schemes, we want money now," AMCU leader Joseph Mathunjwa told a press conference this week.

"This is just another trick to try to confuse us. You have to understand we are representing people who are very impatient and do not want to wait 10 years for benefits, they want it now. Will the executives take a pay cut if the gold price goes down?" a highly placed source in the NUM said Friday.

--Chris Bishop, newsdesk@platts.com
--Edited by Jonathan Dart, jonathan.dart@platts.com