South African Gold Miners and Union Deadlocked Over Wages

(Bloomberg) -- South Africa’s National Union of Mineworkers, the biggest labor group at gold mining companies in the country, said it’s deadlocked over pay with the producers after numerous rounds of negotiations.

The dispute will be referred to the Commission for Conciliation, Mediation and Arbitration and sets the path toward a legal, protected strike, the NUM said in an emailed statement Tuesday.

The union has had seven meetings since pay talks started last month with gold producers, including Sibanye Gold Ltd. and AngloGold Ashanti Ltd., said NUM General Secretary David Sipunzi. “We have reached a stage whereby we understand that the employers are not prepared to give a better offer to the employees,” he said.

South Africa’s gold mines are the world’s deepest and among the most labor intensive, leaving producers struggling to reduce costs. The companies involved in the collective bargaining directly employ about 80,000 workers, according to Minerals Council South Africa, a lobby group for the producers.

“Against a background of a stagnant gold price, rising costs and falling profitability of the sector, the gold producers have tabled two credible offers and have made a number of concessions,” the council said. The companies have tabled three-year deals with increases of as much as 8.2 percent for entry-level underground workers, the group said. “There have not been any significant moves on the part of unions.”

Read more: Union Seeks Up to 37% Base-Pay Hike From South Africa Gold Mines

The NUM is demanding 9,450 rand ($657) a month for surface workers, 10,450 rand for underground workers and a 14.5 percent increase for miners, artisans and officials.

The Solidarity union also rejected the latest offers “in principle,” but will continue with negotiations, it said in a separate emailed statement.

Motsamai Motlhamme, the chief negotiator for the gold producers, told the labor groups that their demands were “unaffordable,” according to the council.

--With assistance from Hilton Shone.

To contact the reporter on this story: Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net

To contact the editors responsible for this story: Alastair Reed at areed12@bloomberg.net, Dylan Griffiths, Helen Robertson

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