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Gold companies offer unions up to 13% increase

Cape Town – The gold sector tabled its wage offer to mining unions on Monday, saying the offer was based on economic and social sustainability.

“Entry level up to category 8 employees are being offered an annual increase effective July 1 ranging between 7.8% and 13%,” spokesperson for the gold producers, Memory Johnstone, told Fin24.

The gold companies include AngloGold Ashanti [JSE:ANG], Evander Gold Mines, Harmony [JSE:HAR], Sibanye Gold [JSE:SGL] and Village Main Reef.

The offer was tabled to employees represented by the Association of Mineworkers and Construction Union (Amcu), the National Union of Mineworkers (NUM), Solidarity and the United Association of South Africa (UASA), for the five-year period from July 1 2015 to June 30 2020.  

The annual increases for entry-level underground workers range from R450 (7.8%) for Harmony and R625 (11.1%) for Sibanye Gold to R750 (13%) for AngloGold Ashanti.

For miners, artisans and officials, the offers range from 4.5% for Harmony, 5% for Sibanye Gold to 6% for AngloGold Ashanti.

In addition the gold producers are offering employees a "special purpose vehicle" to address housing and living conditions of employees.

Severe pressure

"The foundation of the offer is the need to ensure the sustainability of the industry, and consequently, the preservation of jobs and sharing in the gains made by the companies when they have positive margins.

“The industry is currently facing significant challenges as a result of falling dollar gold prices, aging infrastructure and depleting ore bodies, rapidly rising costs, electricity-related constraints and disruptions and greater distances to working faces which affect productivity,” the companies said in a joint statement.

According to the companies margins are under severe pressure, placing the sustainability of many mines and shafts under threat.

“The industry understands that employees are also facing many challenges, which have given rise to their wage demands, but they also recognise the implications of job losses on employees and communities.

“While the industry’s production has halved to around 168 tonnes in the past decade, employment levels have declined by around 30% to 119 000 jobs, adding to the already-high levels of unemployment in South Africa,” they said.  

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