Group Precious Metals
Gold Mines Targeted by AMCU Union Strike Threat Over Pay
(Minews) - The Association of Mineworkers and Construction Union, which represents about 20 percent of South African gold-mining employees, said producers including AngloGold Ashanti Ltd. (ANG) face strike notices over pay demands.

The union has the right to strike, even though most gold employees reached an agreement in collective wage talks last year, AMCU President Joseph Mathunjwa told reporters in Johannesburg today. The union reiterated its threat of a strike in the South African platinum industry, the world’s largest, where it represents most workers.

Gold companies in South Africa, the sixth-biggest producer, in September reached a wage accord with labor groups except the AMCU, the dominant union at the largest mines in the country run by AngloGold, Sibanye (SGL) Gold Ltd. and Harmony Gold Mining Co. The AMCU won the right to strike at the three leading platinum producers after exhausting negotiation processes.

His union’s demand for basic monthly pay at gold mines of 12,500 rand ($1,150) a month for entry-level workers “unsettled capitalists,” Mathunjwa said. That increase compares with the current base salary of 5,400 rand a month following the 8 percent gain agreed to by the National Union of Mineworkers, Solidarity and UASA.

The Chamber of Mines, which represents gold producers, hasn’t been advised of an AMCU decision to strike, Charmane Russell, a spokeswoman for the chamber at Russell & Associates, said by e-mail today.

‘Oppose Strike’

“The chamber will oppose any strike action by AMCU against any of the chamber’s gold members who had participated in the wage negotiations on the ground that such strike action will be unprotected in terms of the law,” she said.

AngloGold fell 1.1 percent to 135.50 rand by the close in Johannesburg. Sibanye slipped 1.5 percent to 13.64 rand. AMCU had about 20,000 members across the two companies and Harmony as of Sept. 3, according to the Chamber.

Bullion slid 28 percent last year, the most since 1981. Some investors lost faith in the metal as a store of value amid expectations the U.S. Federal Reserve would reduce debt purchases and a rally in equities.

“Given the background of a low gold price and cost-cutting measures on the gold price, I think AMCU is saber rattling,” David Davis, a Johannesburg-based analyst at SBG Securities Ltd., said by phone. “The unions and the mining companies cannot afford any disruption of their mines at this time.”

Rand Weakens

South Africa’s currency, which has slumped amid concern that labor disputes at platinum producers will weigh on output, weakened 0.5 percent to 10.8854 rand per dollar at 5:54 p.m. in Johannesburg after dropping to the lowest level since October 2008.

AMCU members “will strike” at Impala Platinum Holdings Ltd. (IMP), the world’s second-biggest producer, Mathunjwa said. The union met with its Impala members on Jan. 13, and plans sessions at Lonmin Plc (LMI) tomorrow and at Anglo American Platinum Ltd. (AMS), the largest producer of the metal, on Jan. 19.

Impala hasn’t heard from the AMCU’s negotiating team this year after talks ended inconclusively in 2013, spokesman Johan Theron said by phone from Johannesburg. “We expected them to renew their mandate before coming back to us.”

Impala last month reached a two-year wage agreement with the NUM at its Marula mine in the northern Limpopo province and at a refinery east of Johannesburg, Theron said. The deal provides increases of as much as 8.5 percent in the first year and 7.5 percent in the second.

A coordinated strike by the AMCU, which wants entry-level wages more than doubled, would paralyze production at Anglo Platinum, Impala and Lonmin. Work stoppages at the three companies may not turn out to be simultaneous, Mathunjwa said.

The AMCU hasn’t given Impala the mandatory 48-hours notice of a strike, he said.

Impala gained 0.2 percent to 116 rand in Johannesburg and Anglo Platinum advanced 2.8 percent at 388.78 rand. Lonmin fell 2.6 percent to 53.50 rand.
Publish date : Thursday 16 January 2014 13:54
Story Code: 2389