South African Unions Sign Three-Year Pay Deal With AngloGold

(Bloomberg) -- Labor groups representing more than 60 percent of workers at AngloGold Ashanti Ltd., a major South African gold producer, signed a three-year wage deal with the company.

The Association of Mineworkers and Construction Union, UASA and Solidarity unions said they accepted the deal Monday. The sides agreed to raise pay by 6.5 percent for the first year and increases at the same rate or inflation -- whichever is higher -- for each of the following two years, Solidarity General Secretary Gideon du Plessis said in a statement.

South Africa’s biggest gold companies and mining unions began negotiations in July. The nation’s gold mines are among the world’s deepest and most labor intensive, with producers struggling to cut costs. Job cuts have sunk employment in the country’s mining industry to the lowest since at least 2009. Elevated levels of inequality and poverty mean that wage negotiations are highly charged and can result in strike action.

The agreement signed Monday was reached without any disruption to business and “is focused on optimizing the company’s remaining operation in South Africa,” said Motsamai Motlhamme, chief negotiator for industry lobby Minerals Council South Africa. AMCU, UASA and Solidarity represent 62 percent of AngloGold’s employees involved in the negotiations.

Other Talks

Among other producers, AMCU has declared a dispute over pay talks with Sibanye Gold Ltd., Harmony Gold Mining Co. and Village Main Reef Ltd. The National Union of Mineworkers, the biggest overall labor union at South African gold producers, has said it’s deadlocked with producers. Livhuwani Mammburu, a NUM spokesman, said he wasn’t aware of a deal with AngloGold.

Negotiations with Sibanye, Harmony and Village Main Reef will continue Sept. 20 under the Commission for Conciliation, Mediation and Arbitration.

“There is a strong possibility that the unions will declare a deadlock with some of the mining houses and proceed to strike if the employers’ revised wage increase offers are not favorable,” Solidarity said.

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