AngloGold, Gold Fields `Optimistic' New Offer Will Avert Strike
quote.bloomberg.com
July 27 (Bloomberg) -- AngloGold Ltd., Gold Fields Ltd. and Harmony Gold Mining Co., South Africa's three biggest gold miners, are ``optimistic'' a strike will be averted after union leaders asked 145,000 mineworkers to review their latest offer.
The companies met the union's demand for a minimum 10 percent raise for all workers and offered a compromise on promotions for several job categories. The National Union of Mineworkers yesterday said it would ask local branches to accept or reject the offer before 6 p.m. Johannesburg time today, when the strike is scheduled to start.
``We are optimistic that the strike won't happen,'' said Frans Barker, chief negotiator for the Chamber of Mines, which represents the companies.
The three companies produced about 16 percent of the world's gold last year. Gold prices rose 4.5 percent in New York last week as the dollar's decline against the euro made the dollar-priced metal cheaper for European buyers and the possibility of a strike in South Africa, the world's biggest source of gold, raised concerns about supply, analysts said.
AngloGold, the world's second-biggest gold producer, Gold Fields, the fourth-biggest, and Harmony, the fifth-biggest, together produce 86 percent of South Africa's gold, about 36,800 ounces a day, according to Bloomberg data.
In addition to the 10 percent wage increase, the companies offered to conduct a review of all wage categories by the end of the year to determine whether some groups should be promoted, Barker said.
Workers Awaited
Union spokesman Gwede Mantashe declined to speculate on what the branches will decide.
``I can't be optimistic,'' he said Saturday. ``I will react when we have a reaction from the branches.''
The union is seeking to raise living standards for workers nine years after the end of apartheid, and compensate them for inflation that peaked at an annual rate of 11.3 percent in October.
The companies' current offer will increase labor costs by about 25 percent, the chamber estimates. The complete list of union demands would raise them by 44 percent.
The companies pay their costs in rand and sell metal for dollars, so the rand's 60 percent surge against the dollar since the beginning of 2002 has increased costs. Labor accounts for about 55 percent of the costs for South African gold miners, according to the chamber.
A strike would cost the companies as much as 125 million rand ($16.8 million) a day in lost production.
``The producers can't afford'' a lengthy strike, said Allan Cooke, an analyst at HSBC Securities Johannesburg. ``With the rand as strong as it is, their margins are already under pressure.''
The last widespread mine strike in South Africa was in 1987, when 300,000 workers walked off the job for three weeks.
Last Updated: July 27, 2003 03:50 EDT
[hmmm... what else happened in 1987? Rings a bell for some reason -ggg-]
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