S African Miners Ready To Call Gold Strike Action -Union
07/10/2003 05:24
JOHANNESBURG -(Dow Jones)- South Africa's National Union of Mineworkers said Thursday that they are ready to strike at the country's gold mines if their wage demands aren't met.
Talks between the NUM and the industry-backed Chamber of Mines, which started in May, have deadlocked.
The Chamber of Mines, which is leading the negotiations on behalf of the country's gold producers, has called the NUM's demands unrealistic, while the NUM says the Chamber's reluctance to adhere to their demands is inhumane.
The NUM's opening wage gambit was for a 20% pay hike, but the Chamber has refused to budge beyond 7.0%.
The Chamber argues that, because wages account for around half the gold producers total costs, a 10% wage hike would equate to a 5% drop in earnings at a time when company profits are being slashed because of the strengthening rand.
But this isn't cutting any ice with the NUM, who say the gold mining companies, whose output is priced in dollars, enjoyed massive earnings growth during 2001 as the rand slumped to an all-time low against the greenback of ZAR13.85.
"The industry's procrastination is a clear indication that they want a strike, and if it requires a strike to turn the tide toward change and humane conditions, the mining industry will get it," said Gwede Mantashe, the NUM's General Secretary and chief negotiator.
Mantashe said talks are scheduled to end today, with neither party penciling in any date for further talks.
"Mineworkers can no longer accept to open their chests to the brutality of dust and the maiming of rocks in pursuit of wealth for others, while their wives bathe their infants in tears and feed them on crumbs. We have told them to give us their final offers now, because in our view the process has reached its end," said Mantashe.
Frans Barker, the head of the Chamber of Mines negotiating team, wasn't immediately available for comment.
Aside from wages, the NUM is looking to discuss other issues such as annual leave, retirement funds, housing, job grading and health care.
South Africa's biggest gold miners - Harmony (HMY), Gold Fields (GFI) and AngloGold (AU) - have repeatedly warned that as long as the rand remains strong, future earnings will be severely hit.
The rand's been recovering since the end of 2001, which means dollars are buying fewer rands.
"When you look at the state of the gold producer's earnings, and see how hard they've been hit because of the rand, a potential 10% wage increase means the downside for the gold mining industry is pretty large," said Leon Esterthuizen, a gold mining analyst at Investec.
Gold Fields, South Africa's second-biggest producer, releases its full-year earnings Aug. 1. Harmony issues full- year numbers Aug. 4, while AngloGold, the county's biggest producer, releases its half-yearly figures Aug. 8.
Around 0905 GMT on the JSE Securities Exchange, AngloGold was trading down 2.1% at ZAR233.00, Harmony was trading down 2.6% at ZAR94.50 and Gold Fields was down 2.4% at ZAR88.80.
-By Adam Aljewicz, Dow Jones Newswires; +27 11 783 7848; adam.aljewicz@dowjones.com
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