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Johannesburg – The National Union of Mineworkers (NUM) is planning to submit demands to the gold sector next week calling for a 75% hike in the basic pay for entry-level workers, according to union sources familiar with the matter.
"For the basic wage at the entry level, we are planning to demand a raise to R10 000 a month in the first year from R5 700 at present," said one NUM source, who asked not to be named. This was confirmed by a second source in the union.
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That would set the stage for tough negotiations and a potentially protracted dispute with companies in the gold sector, where profit margins are under pressure.
The basic wage is not the only remuneration miners get, nor is it the only labour cost to companies. Miners also get various allowances structured into their pay packages.
NUM, which represents 57% of the workforce in the gold sector, said in March it might ask for increases of up to 100% in the gold, coal and diamond sectors, but was still finalising its demands.
The sources did not disclose the demands in the sectors outside of gold.
The new NUM wage demand plans would not affect Gold Fields [JSE:GFI], as the union signed a three-year deal with the company two weeks ago for a 21% increase for the lowest-paid workers to R7 000.
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But the NUM has upcoming talks with AngloGold Ashanti [JSE:ANG], Harmony Gold [JSE:HAR], and Sibanye Gold [JSE:SGL], whose two-year wage agreements with the union expire in June.
They will almost certainly baulk at big, double-digit demands at a time when inflation in the SA economy is 4% and as they contend with depressed prices and rising power and labour costs.
Spot gold is currently fetching just over $1 190 an ounce, about 38% down from its historic peak of $1 920 scaled in September 2011, and South Africa's once towering bullion industry has long been in a state of steep decline.
Harmony has been battling to turn a profit and reported a headline loss of R496m in the three months to December 31, 2014.
AMCU, which is striving to make inroads in the gold sector and led a five-month strike last year in the platinum sector, is expected to submit its own gold wage demands next month.
